The Reserve Bank of India (RBI) will announce the decisions from the bi-monthly review meeting of the Monetary Policy Committee (MPC) today, Friday. The policy interest rate decision was finalised during the three-day review meeting that began on Wednesday. This meeting occurred amid rising inflation and weak GDP figures. Experts believe the central bank may keep the short-term lending rate, i.e., the repo rate, stable. However, given the mixed economic trends, the MPC might consider altering the cash reserve ratio (CRR).
Last MPC Meeting of Shaktikanta Das’s Tenure
The Monetary Policy Committee (MPC) is the main body responsible for decisions on monetary policy, led by Reserve Bank of India (RBI) Governor Shaktikanta Das. The committee consists of six members, including the governor. According to a post on the social media platform X, Shaktikanta Das will announce the decisions from the MPC meeting at 10 AM on Friday. This will be the last MPC meeting during Das’s current tenure, which ends on December 10. Since February 2023, the RBI has kept the repo rate at 6.5%. The government has tasked the RBI with ensuring that retail inflation stays at 4%, with a variation of 2%.
#WATCH | Mumbai | RBI Governor Shaktikanta Das says, “The Monetary Policy Committee decided by a majority of 4:2 to keep the policy repo rate unchanged at 6.5%…”
(Source: RBI) pic.twitter.com/oteBt4FLlQ
— ANI (@ANI) December 6, 2024
Low Hopes of a Rate Cut
People in India are hoping for lower interest rates on personal, home, and auto loans. A cut in the repo rate would make it possible for loan interest rates to decrease. The repo rate is the rate at which the RBI lends money to banks. If banks get cheaper loans, they can offer lower-interest loans to customers. However, experts say there is little chance of a rate cut this time. They believe any relief might only come in 2025. An SBI report says, “We do not expect a rate cut this financial year. The first rate cut may happen in April 2025.”
#RBIPolicy | #RBI maintains #RepoRate at 6.50% for the 11th consecutive meet #RBIGuv #ShaktikantaDas pic.twitter.com/s1P8GP3Qfx
— CNBC-TV18 (@CNBCTV18Live) December 6, 2024
RBI Maintains Repo Rate at 6.50% for 11th Time in a Row
The Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 6.50% during its latest Monetary Policy Committee (MPC) meeting, marking the 11th consecutive time this rate has remained stable. The central bank continues its cautious stance, prioritizing inflation management within the target range of 4% ± 2%. With no change in the repo rate, borrowers across personal, home, and auto loans may not see a reduction in interest rates for now. Experts predict that rate cuts might only occur in 2025, depending on economic conditions and inflation trends.