The Reserve Bank of India (RBI), under the leadership of the Monetary Policy Committee (MPC), has decided to keep the repo rate steady at 6.5%. This decision marks the seventh consecutive time that the repo rate has remained unchanged. The announcement was confirmed by RBI governor Shaktikanta Das.
The MPC’s decision to maintain the repo rate is in line with their focus on liquidity management to control inflation. By keeping the repo rate at the current level, the committee aims to ensure stability in the economy and support the ongoing economic recovery efforts.
The repo rate is the rate at which commercial banks borrow money from the central bank. It plays a crucial role in determining interest rates for loans and deposits. By leaving the repo rate unchanged, the RBI aims to provide a favorable environment for businesses and individuals to access credit at affordable rates.
In addition to the repo rate, the MPC also maintained its ‘withdrawal of accommodation’ stance. This indicates that the committee is cautious about withdrawing the accommodative measures implemented to support the economy during the pandemic. The focus on liquidity management suggests that the central bank is closely monitoring inflation trends and taking measures to prevent any significant spikes.
The decision to keep the repo rate unchanged and maintain the ‘withdrawal of accommodation’ stance aligns with the RBI’s commitment to maintaining a balanced approach to monetary policy. The central bank aims to support economic growth while ensuring inflation remains under control.
Overall, the steady repo rate reflects the RBI’s confidence in the ongoing economic recovery and its commitment to supporting growth. As the economy continues to stabilize and inflation remains a key concern, the central bank will closely monitor economic indicators and take appropriate measures to maintain stability.
For more information on the RBI’s monetary policy decisions and their implications, you can read the full article on the Economic Times website.
