No change in Repo Rate for the Eleventh Time – RBI Monetary Policy


No change in Repo Rate for the Eleventh Time – RBI Monetary Policy 

Recently, the Central Bank - Reserve Bank of India were released it's MPC (Monetary Policy Committee) insights related on Bank Interest rate and economy data. It was the first meet for the Current Financial year 2022-23. 

The Reserve Bank of India(RBI) has said that there will be no change in the REPO and Reverse REPO rate. Generally, the REPO rate is the interest rate charged by the Central bank on loans to banks in the Country, where the Central bank borrows a loan with a particular interest rate from banks is called as Reverse REPO rate.

According to the RBI, the REPO rate will remain unchanged at 4 Percent and Reverse REPO at 3.35 Percent. It is noteworthy that the Bank Repo rates have not changed much since the year 2020, given the recession caused by the Covid-19 Epidemic.

For the Eleventh time, by this MPC meet - There is no change in the REPO interest rate. However the bank rates may be hiked in the coming months considering the Inflation rate.

The Reserve Bank of India has projected the Retail Inflation at 5.7 Percent and GDP growth of 7.2 Percent for the current fiscal year 2022-23. Earlier, it was estimated at 7.8 Percent on GDP and Inflation at 5.3 Percent for the said year.

The Central bank has also stated that the current objective is to control the Inflation rather than the Country's Economic growth. With the rising commodity prices, the failure to raise interest rates will cause fears in the Real Economy. At the same time, rising interest rates will hurt business earnings and Equity market.

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