Mumbai: The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) on Friday decided yet again to maintain the status quo on repo rate in the wake of elevated inflation.
The rate-setting panel voted to keep the policy repo rate unchanged at 6.50% for the 11th consecutive time.
This means there would not be any change in home loan EMIs or borrowing costs for the industry.
“After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the Monetary Policy Committee (MPC) decided by a 4:2 majority to keep the policy repo rate unchanged at 6.5%. Consequently, the standing deposit facility (SDF) rate remains at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%,” RBI Governor Shaktikanta Das said while announcing the bi-monthly monetary policy.
The RBI has kept the key lending rate unchanged since February 2023, citing persistent inflation pressures. In October this year, retail inflation climbed to 6.2pc breaching the RBI’s upper tolerance level.
The Monetary Policy Committee also decided unanimously to continue with the neutral stance and to remain unambiguously focused on a durable alignment of inflation with the target while supporting growth.
The rate-setting panel met on 4th, 5th and 6th of December 2024.
The RBI Governor said that the MPC took note of the recent slowdown in the growth momentum, which translates into a downward revision in the growth forecast for the current year, 2024-25.
“Going forward into the second half of this year and the next year, the MPC assessed the growth outlook to be resilient but warranting close monitoring,” he said.
The chorus for a cut in repo rates has, however, been growing in recent times with economic growth moderating. Union Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal had last month raised concerns about high interest rates and called for making it affordable. The remarks came amid some of the high-frequency economic indicators suggesting a slowdown in the economy.
The National Statistical Office (NSO) has pegged GDP growth in the July-September quarter (Q2) of the current financial year 2024-25 at a seven-quarter low of 5.4%. The GDP had expanded at 6.7% in the June quarter of the current fiscal year and at 8.1% in the Q2 of 2023-24.
“Notwithstanding the recent aberration in growth and inflation trajectories, the Indian economy continues its journey on a sustained and balanced path towards progress,” the RBI Governor said while making a monetary policy statement.
