RBI Monetary Policy Meeting: There has been no change in the repo rate. The Reserve Bank today announced the decisions taken in the bi-monthly review meeting of the Monetary Policy Committee (MPC). The Reserve Bank has kept the repo rate stable at 6.5 percent since February 2023. This time there was little hope of change in it.
RBI Monetary Policy Meeting: The Reserve Bank today announced the decisions taken in the bi-monthly review meeting of the Monetary Policy Committee (MPC) on Friday. In this, the Governor of the Reserve Bank Shaktikanta Das said that no change has been made in the repo rate. This meeting started on Wednesday. Experts already believed that the Reserve Bank would not make any change in the repo rate. In the meeting, the MPC has decided to maintain the repo rate at 6.5% with a majority of 4-2. This is the 11th time that the Reserve Bank has not made any change in the repo rate. The SDF rate also remains unchanged at 6.25% and the MSF rate at 6.75%.
What will be the effect of no change in repo rate?
With no change in repo rate, people will not get relief from expensive loans. If the repo rate was low, banks would give loans to people at a lower interest rate. Looking at inflation, it was expected that this time the Reserve Bank would reduce the repo rate.
Reduction in CRR
A decision was also taken on the cash reserve ratio (CRR) in the meeting. It has been reduced from 4.5 percent to 4 percent. That is, it has been cut by 50 basis points. However, this cut will be done twice at the rate of 25-25 basis points. The first cut will be effective from December 14 and the second cut will be effective from December 28.
What is MPC?
MPC is the highest unit to take decisions regarding monetary policy. It is headed by Reserve Bank Governor Shaktikanta Das. This committee has a total of six members including the governor. This is the last MPC meeting of Das’s current term. His term ends on December 10. The Reserve Bank has kept the repo rate stable at 6.5 percent since February 2023.
Fall in the stock market
The stock market fell due to no change in the repo rate in the MPC meeting. At 10:15 am, the Sensex fell 167.32 points to 81,598.54. At the same time, the Nifty also declined. Nifty fell 57.45 points to 24,650.95. Earlier on Friday morning, the market started on the green mark.
