MUMBAI: At its February review meeting, the Reserve Bank of India‘s (RBI) Monetary Policy Committee unanimously agreed to maintain the status quo, with the policy repo rate remaining at 6.5% for the sixth consecutive meeting. The interest rate at which the RBI loans money to other banks is known as the repo rate. Following a three-day review meeting, RBI Governor Shaktikanta Das discussed the policy statement on Friday morning. He cited stable growth dynamics and moderate inflation as justifications for keeping the monetary stance as it is. According to Das, growth is holding up better than anticipated and inflation is getting closer to the target. While retail inflation in India is over the desired 4 percent scenario, it is still within the RBI’s comfortable range of 2 to 6 percent.December had a 5.69 percent figure. According to Das, the MPC also resolved, with a majority of five out of six members, to continue concentrating on the removal of accommodation in order to guarantee that inflation gradually approaches the objective while promoting growth. In the July-September quarter of the current fiscal year 2023–24, the Indian economy increased by 7.6%, continuing to be the fastest-growing major economy. India’s GDP increased by 7.8% during the April–June quarter. The RBI’s bi-monthly monetary policy committee (MPC) meeting got underway on Tuesday and will last for three days. During a financial year, the RBI normally has six biweekly meetings when it discusses a range of macroeconomic indicators, interest rates, the money supply, and the outlook for inflation. The central bank may have reacted to a significant drop in inflation and the possibility of more reduction by lowering the main interest rate. Many nations, including developed ones, have been concerned about inflation, but India has generally done a pretty good job of controlling its inflation trend. With the exception of the most recent pauses, the RBI has increased the repo rate to 6.5% from May 2022 by a total of 250 basis points in an effort to combat inflation. One tool of monetary policy that usually serves to reduce demand in the economy and lower the inflation rate is raising interest rates.
