RBI MPC Keeps Repo Rate Unchanged: What It Means for You

The Reserve Bank of India (RBI) has announced its monetary policy decision following the meeting of the Monetary Policy Committee (MPC), marking the first announcement for the Financial Year 2024-25 (FY25). In a continuation of its stance from the previous six MPC meetings, the central bank has opted to keep the repo rate unchanged at 6.5 percent.

Understanding the MPC’s Role
The MPC is tasked with maintaining retail inflation within four percent, with a margin of two percent on either side. Meeting at least four times a year, the committee deliberates on the country’s economic direction, balancing growth sustainability with inflation targets.

Key Interest Rates to Watch
In addition to the repo rate, which remains at 6.5 percent, attention should be paid to other key interest rates such as the Standing Deposit Facility (SDF) rate, Marginal Standing Facility (MSF) rate, and the monetary policy stance.

What Is Repo Rate?
Repo rate is the rate at which the central bank lends short-term funds to banks. Currently holding steady at 6.5 percent since April 2023, expectations for rate cuts are subdued, with potential adjustments anticipated in the third quarter of FY25.

Global Macroeconomic Influences
The RBI’s decision may be influenced by global economic trends, particularly in anticipation of the US Federal Reserve’s upcoming rate decisions. While the US Fed is expected to make its first rate cut in June, India’s monetary policy remains independent amidst these global shifts.

What Comes Next
Following the announcement, RBI Governor Shaktikanta Das will address the press at noon. The meeting’s conclusions can be streamed online on RBI’s official platforms. Subsequent MPC meetings for FY25 are scheduled for June, August, October, December, and February, providing further insights into the central bank’s policy trajectory.