<a name="OLE_LINK1"></a>The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent, as announced by Governor Shaktikanta Das following the Monetary Policy Committee (MPC) meeting on Thursday. <o:p></o:p>

This decision marks a continuation of the RBI's approach over the past year, where the repo rate has remained at 6.5 per cent since the last increase in February 2023, aimed at curbing inflation influenced by global factors.

"This decision underscores the central bank's cautious approach, balancing economic stability, and inflationary concerns in a volatile pre-election environment," Adhil Shetty, CEO of Bankbazaar.com said.

Shetty mentioned that in the current economic landscape, there is persistent concern about food inflation, whereas core inflation has exhibited signs of softening, prompting a positive response from the market.

He further noted that globally, growth remains stable, with indicators suggesting recovery in FY24.

However, Shetty also pointed out that central banks are exercising caution, prioritising financial stability before committing to major rate cuts.

On the subject of loans, Shetty noted, "While home buyers in India had hoped for rate reductions to bolster their purchasing confidence, the RBI's decision to maintain interest rates, albeit on the higher side, ensures loans remain relatively stable. Despite this, the residential real estate sector in India continues to show resilience, with an uptick in property purchases."

In addition to the interest rate decision, the RBI revised the GDP growth rate for the fiscal year 2023-24, indicating an upward adjustment from 7 per cent to 7.3 per cent. <o:p></o:p>

The central bank also provided insights into its inflation outlook, projecting consumer inflation at 5.4 per cent for the current financial year (2023-24) and further anticipating a decrease to 4.5 per cent in the upcoming fiscal year (2024-25).

Despite a decline in retail inflation from its peak of 7.44 per cent in July 2023, the current rate stands at 5.69 per cent as of December 2023.

Shetty stated that rural demand remains robust, supported by the extension of welfare schemes, which further bolsters economic activity.

Additionally, he&nbsp;mentioned that looking ahead, the projected real GDP growth for FY 2024-2025 stands at a promising 7 per cent, signalling optimism for sustained economic expansion.

<o:p></o:p><o:p></o:p>

While this remains elevated, it falls within the Reserve Bank's comfort zone of 4-6 per cent.<o:p></o:p>

The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent, as announced by Governor Shaktikanta Das following the Monetary Policy Committee (MPC) meeting on Thursday.

The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent, as announced by Governor Shaktikanta Das following the Monetary Policy Committee (MPC) meeting on Thursday. This decision marks a continuation of the RBI's approach over the past year, where the repo rate has remained at 6.5 per cent since the last increase in February 2023, aimed at curbing inflation influenced by global factors. "This decision underscores the central bank's cautious approach, balancing economic stability, and inflationary concerns in a volatile pre-election environment," Adhil Shetty, CEO of Bankbazaar.com said. Shetty mentioned that in the current economic landscape, there is persistent concern about food inflation, whereas core inflation has exhibited signs of softening, prompting a positive response from the market. He further noted that globally, growth remains stable, with indicators suggesting recovery in FY24. However, Shetty also pointed out that central banks are exercising caution, prioritising financial stability before committing to major rate cuts. On the subject of loans, Shetty noted, "While home buyers in India had hoped for rate reductions to bolster their purchasing confidence, the RBI's decision to maintain interest rates, albeit on the higher side, ensures loans remain relatively stable. Despite this, the residential real estate sector in India continues to show resilience, with an uptick in property purchases." In addition to the interest rate decision, the RBI revised the GDP growth rate for the fiscal year 2023-24, indicating an upward adjustment from 7 per cent to 7.3 per cent. The central bank also provided insights into its inflation outlook, projecting consumer inflation at 5.4 per cent for the current financial year (2023-24) and further anticipating a decrease to 4.5 per cent in the upcoming fiscal year (2024-25). Despite a decline in retail inflation from its peak of 7.44 per cent in July 2023, the current rate stands at 5.69 per cent as of December 2023. Shetty stated that rural demand remains robust, supported by the extension of welfare schemes, which further bolsters economic activity. Additionally, he mentioned that looking ahead, the projected real GDP growth for FY 2024-2025 stands at a promising 7 per cent, signalling optimism for sustained economic expansion. While this remains elevated, it falls within the Reserve Bank's comfort zone of 4-6 per cent.

RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24

The <a href="https://www.wionews.com/business-economy/rbi-cuts-repo-rate-by-35-basis-points-to-540-loans-to-get-cheaper-241299">Reserve Bank of India</a>, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth.

<a href="https://www.wionews.com/business-economy/reserve-bank-of-india-cuts-repo-rate-by-25-bps-from-540-per-cent-to-515-per-cent-253649">Also Read: Reserve Bank of India cuts repo rate by 25 bps, &nbsp;from 5.40 per cent to 5.15 per cent</a>

The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal.

"Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo,"&nbsp;the Monetary Policy Committee (MPC) said.

The six-member committee voted unanimously to hold rates, but also said that there is ?policy space available for further action?. 
Between February and October 2019, the RBI had reduced repo rate by 135 basis points.

After leaving benchmark interest rates rates unchanged in the second consecutive policy review, RBI governor Shaktikanta Das said the central bank has many other instruments to address the sluggishness the economy, not just interest rates.

The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy pegged GDP growth for FY21 at 6 per cent, but guided towards an uncertain inflation outlook.

In a January 31 release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 per cent from 6.8 per cent provided in the provisional estimates of May 2019. Given this, the central bank noted that the economy is still plagued by deep output gaps.

"The RBI has several instruments to address the sluggishness in the growth momentum," Das told reporters at the customary post-policy conference. The monetary policy committee (MPC) kept the policy repo rate unchanged at 5.15 per cent, continuing with the accommodative stance to revive growth.

The governor said the continuity in policy from last pause should not be read as a pointer to future actions. "While the decision is as per expectations, it is important not to discount RBI," he said.

The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth.

The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth. Also Read: Reserve Bank of India cuts repo rate by 25 bps, from 5.40 per cent to 5.15 per cent The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal. "Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo," the Monetary Policy Committee (MPC) said. The six-member committee voted unanimously to hold rates, but also said that there is ?policy space available for further action?. Between February and October 2019, the RBI had reduced repo rate by 135 basis points. After leaving benchmark interest rates rates unchanged in the second consecutive policy review, RBI governor Shaktikanta Das said the central bank has many other instruments to address the sluggishness the economy, not just interest rates. The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy pegged GDP growth for FY21 at 6 per cent, but guided towards an uncertain inflation outlook. In a January 31 release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 per cent from 6.8 per cent provided in the provisional estimates of May 2019. Given this, the central bank noted that the economy is still plagued by deep output gaps. "The RBI has several instruments to address the sluggishness in the growth momentum," Das told reporters at the customary post-policy conference. The monetary policy committee (MPC) kept the policy repo rate unchanged at 5.15 per cent, continuing with the accommodative stance to revive growth. The governor said the continuity in policy from last pause should not be read as a pointer to future actions. "While the decision is as per expectations, it is important not to discount RBI," he said.

Reserve Bank of India keeps repo rate unchanged; predicts 6% GDP growth in next fiscal

India&#39;s important monitory policy decision over rate cut will be made on Wednesday by the Reserve Bank of India (RBI).

Today&#39;s announcement will be a crucial one, given that demonetisation has wiped out liquidity from the market while infusing additional liquidity in banks.

The&nbsp;six-member monetary policy committee (MPC) will be guiding the RBI on the rate cut. Most experts and analysts predict a 25 basis points rate cut on the back of the slowdown in the economy post the demonetisation move by the government.

RBI governor Urjit Patel who will be addressing the media today, will not only have to deal with questions on the rate cut but also the implementation of the demonetisation move as he will speak to media for the first time since the surgical strike on black money. The key lending rate could be reduced by 25 to 50 basis points.

The current repo rate stands at 6.25 per cent&nbsp;after the RBI governor cut the lending rate by 25 basis points in October.

The decision of the central bank will have multiple effects.

The 25 basis point repo rate cut is likely to be influenced by inflationary pressure on the&nbsp;economy, a&nbsp;possible slowdown, fall in consumer discretionary spending and&nbsp;rupee depreciation to the dollar.

The currency drain out impacts the consumer discretionary spending. Most brokerage reports have given a 1 per cent downgrade on the GDP outlook for India post demonetisation. India has clocked in 7.3 per cent growth in July-September -&nbsp;a number that reflects growth pre-demonetisation.

Whether India can continue the rate of growth&nbsp;remains to be seen. A cut in repo rate will enable banks to borrow at lower interest rates and the banks can transfer the benefits to the end consumer. Even the rising oil prices pose a threat to the economy, impacting the RBI&#39;s decision on the repo rate cut.

The central bank&nbsp;will also have to consider the movement in the rupee, as a sharp depreciation of the rupee has ensured withdrawals from the FCNR&nbsp;(Foreign Currency Non-Residential) deposits. A higher demand for dollar depreciates the value of the rupee.

The US Fed rate hike, expected this month at the Federal Open Market Committee (FOMC), will be closely monitored.&nbsp;If the Fed decides to hike rates, it will make the United States a more attractive destination for investors to park their funds compared to the other emerging markets, especially India.

This has a direct impact on the Indian currency and experts feel it could depreciate the rupee further. Amidst these concerns that loom large, the RBI will have to be extremely careful on the extent to which it slashes the repo rate, as inflation and rupee depreciation&nbsp;pose to be major deterrents.

(WION)

This could mean banks lending at lower interest rates, transferring the benefits to the end consumer

India's important monitory policy decision over rate cut will be made on Wednesday by the Reserve Bank of India (RBI). Today's announcement will be a crucial one, given that demonetisation has wiped out liquidity from the market while infusing additional liquidity in banks. The six-member monetary policy committee (MPC) will be guiding the RBI on the rate cut. Most experts and analysts predict a 25 basis points rate cut on the back of the slowdown in the economy post the demonetisation move by the government. RBI governor Urjit Patel who will be addressing the media today, will not only have to deal with questions on the rate cut but also the implementation of the demonetisation move as he will speak to media for the first time since the surgical strike on black money. The key lending rate could be reduced by 25 to 50 basis points. The current repo rate stands at 6.25 per cent after the RBI governor cut the lending rate by 25 basis points in October. The decision of the central bank will have multiple effects. The 25 basis point repo rate cut is likely to be influenced by inflationary pressure on the economy, a possible slowdown, fall in consumer discretionary spending and rupee depreciation to the dollar. The currency drain out impacts the consumer discretionary spending. Most brokerage reports have given a 1 per cent downgrade on the GDP outlook for India post demonetisation. India has clocked in 7.3 per cent growth in July-September - a number that reflects growth pre-demonetisation. Whether India can continue the rate of growth remains to be seen. A cut in repo rate will enable banks to borrow at lower interest rates and the banks can transfer the benefits to the end consumer. Even the rising oil prices pose a threat to the economy, impacting the RBI's decision on the repo rate cut. The central bank will also have to consider the movement in the rupee, as a sharp depreciation of the rupee has ensured withdrawals from the FCNR (Foreign Currency Non-Residential) deposits. A higher demand for dollar depreciates the value of the rupee. The US Fed rate hike, expected this month at the Federal Open Market Committee (FOMC), will be closely monitored. If the Fed decides to hike rates, it will make the United States a more attractive destination for investors to park their funds compared to the other emerging markets, especially India. This has a direct impact on the Indian currency and experts feel it could depreciate the rupee further. Amidst these concerns that loom large, the RBI will have to be extremely careful on the extent to which it slashes the repo rate, as inflation and rupee depreciation pose to be major deterrents. (WION)

Reserve Bank of India likely to cut repo rate by 25-50 basis points

The&nbsp;Reserve Bank of India (RBI) may cut repo and reverse repo rate owing to the rise in new&nbsp;deposits with the banks at the back&nbsp;of demonetisation.&nbsp;

While the central bank could cut its repo rate, the rate at which RBI&nbsp;lends to banks; there could also be a cut in the&nbsp;reverse repo rate&nbsp;as the banks are most likely to park their additional liquidity with the RBI.

In the reverse repo, banks park their excess funds with the RBI in exchange for government bonds. The reverse repo rate is the interest&nbsp;rate that the banks earn from the RBI on these funds.

Deflationary pressures&nbsp;could cloud the economy in the short term; the effects of which can be disruptive for the economy. With that in mind, the monetary policy committe may cut the&nbsp;repo and reverse repo rate&nbsp;at its December 6th meeting.

Various data records show that banks have received deposits of around 5.12 trillion rupees between November 10 and 18.

The &nbsp;current repo rate stands at 6.25 per cent as on October 4, down 25 basis points while the reverse repo rate currently stands at 5.75 per cent.

 
(WION)

 
&nbsp;

The near-term deflation could cloud the economy in the short term; the effects of which can be disruptive for the economy

The Reserve Bank of India (RBI) may cut repo and reverse repo rate owing to the rise in new deposits with the banks at the back of demonetisation. While the central bank could cut its repo rate, the rate at which RBI lends to banks; there could also be a cut in the reverse repo rate as the banks are most likely to park their additional liquidity with the RBI. In the reverse repo, banks park their excess funds with the RBI in exchange for government bonds. The reverse repo rate is the interest rate that the banks earn from the RBI on these funds. Deflationary pressures could cloud the economy in the short term; the effects of which can be disruptive for the economy. With that in mind, the monetary policy committe may cut the repo and reverse repo rate at its December 6th meeting. Various data records show that banks have received deposits of around 5.12 trillion rupees between November 10 and 18. The current repo rate stands at 6.25 per cent as on October 4, down 25 basis points while the reverse repo rate currently stands at 5.75 per cent. (WION)

Demonetisation: Reserve Bank of India may cut repo rates due to new?deposits with banks

repo-rates

Repo Rates, News on Repo Rates, stories on Repo Rates, articles on Repo Rates, Repo Rates stories at Wion, Repo Rates news, Repo Rates latest news