No change in repo rate expected for the seventh time: RBI will announce interest rates today, currently the interest rate remains at 6.50%.

No change in repo rate expected for the seventh time: RBI will announce interest rates today, currently the interest rate remains at 6.50%.

Today i.e. Friday (April 5) is the last day of the Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI). RBI Governor Shaktikanta Das will hold a press conference today itself and announce all the decisions taken in this meeting including the repo rate. This three-day meeting started on 3 April. This is the first MPC meeting of RBI for the financial year 2024-25. This meeting takes place every two months. RBI will not change the interest rate this time also. According to experts, RBI will not change the repo rate i.e. interest rate this time also. Currently the repo rate remains at 6.50%. RBI had not increased interest rates earlier in its meeting held in February 2024. This was the sixth consecutive time that RBI has not made any change in interest rates. RBI last increased interest rates by 0.25% to 6.5% in February 2023. There are six members in the MPC of RBI. It has both external and RBI officials. Along with Governor Das, RBI official Rajeev Ranjan serves as the executive director and Michael Debabrata Patra is the deputy governor. Shashank Bhide, Ashima Goyal and Jayant R Verma are external members. Repo rate is a powerful tool to fight inflation. RBI has a powerful tool to fight inflation in the form of repo rate. When inflation is very high, RBI tries to reduce money flow in the economy by increasing the repo rate. If the repo rate is high then the loan received by banks from RBI will be expensive. In return, banks make loans costlier for their customers. This reduces money flow in the economy. If money flow decreases, demand decreases and inflation decreases. Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such a situation, RBI reduces the repo rate. Due to this, the loan from RBI becomes cheaper for the banks and the customers also get the loan at a cheaper rate. Let us understand this with an example. When economic activities came to a standstill during the Corona period, demand decreased. In such a situation, RBI had increased the money flow in the economy by reducing interest rates. RBI had also released inflation and GDP estimates in February. Know what the inflation figures say? 1. Retail inflation 5.09% in February Retail inflation has come down marginally to 5.09% in February 2024. Earlier in January 2024, inflation was 5.10%. RBI’s range regarding inflation is 2%-6%. Ideally, RBI would like retail inflation to remain at 4%. 2. Wholesale inflation rate was 0.20%. Wholesale inflation has come down to 0.20% in February. In January it was 0.27%. This is also the lowest level of inflation in 4 months. Inflation in November was 0.26%. Inflation has declined, but prices of food items have increased. How does inflation affect? Inflation is directly related to purchasing power. For example, if the inflation rate is 7%, then Rs 100 earned will be worth just Rs 93. Therefore, investment should be made only keeping inflation in mind. Otherwise the value of your money will reduce.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top