The Indian benchmark indices traded weak after opening on a negative note on Thursday, reacting to the unchanged policy repo rate announced by the Reserve Bank of India
Economists and Industry bodies have welcomed RBI's move to keep the policy repo rate unchanged they said that maintaining the repo rate provides stability and predictability in the financial markets.
Governor Das stated, "After a detailed assessment of the evolving macroeconomic and financial conditions and the overall outlook. It decided by a majority of four members to keep the policy repo rate unchanged at 6.5 per cent."
The RBI's Monetary Policy Committee (MPC) maintained the status quo on the Repo Rate, keeping it unchanged at 6.5 per cent. The decision comes amidst a backdrop of economic uncertainties both domestically and globally.
Noting that that economic growth in 2024-25 is projected to slow by over half a percent relative to 2023-24, Varma said it was a reminder that high interest rates entail a growth sacrifice.
Pressure in food prices has been interrupting the ongoing disinflation process in India, and posing challenges for the final descent of inflation trajectory to the 4 per cent target, as per minutes of RBI's monetary policy meeting that was held earlier this month.
Along anticipated lines, RBI kept the policy repo rate unchanged at 6.50 per cent, the seventh time in a row. The repo rate is the rate of interest at which the RBI lends to other banks.
The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.
The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.
S&P Global Ratings forecast rate cuts of up to 75 basis points (100 basis points is equal to 1 percentage point) in India by its central bank in the financial year 2024-25.