RBI MPC: The Monetary Policy Committee of the Reserve Bank has not made any change in the interest rates. The 6-member Monetary Policy Committee headed by Reserve Bank of India Governor Shaktikanta Das has decided not to change the interest rates. Repo rate remains at 4%. The MPC has unanimously decided this. The reverse repo rate remains at 3.35 per cent. Let us know that the meeting of the MPC started on October 7. Earlier this meeting was to be held from 29 September to 1 October.
RBI MPC Policy
Earlier in August, the RBI MPC met in which interest rates did not change. Earlier in May, interest rates were cut by 40 basis points and in March by 75 basis points. So far this year, 115 basis points have been cut in rates. This time at the same time, from February 2019 till now the MPC has cut the repo rate by 2.50 per cent. All the 6 MPC members voted in favour of keeping the interest rates stable. The approach to interest rates remains intact.
- Repo rate: 4%
- Reverse Repo Rate: 3.35%
- Cash Reserve Ratio: 3%
- Bank Rate: 4.25%
Signs of recovery in the economy
Announcing the monetary policy, RBI Governor Shaktikanta Das said that now the focus of RBI is more on revival after COVID. He says that the recent economic data are showing good signs. There are strong signs of recovery in the global economy. Recovery has been seen in many countries in manufacturing, retail sales. Consumption, export has also shown improvement in many countries.
Shaktikanta Das says that there is hope for a boom in the economy. We are thinking of a better future. Things are getting better in all sectors. The hope of growth is showing. The outlook for Rabi crops is looking better. Instead of stopping the crisis of epidemic, now the focus is more on economic reforms.
What is the repo rate?
Repo rate is the rate at which RBI lends to banks. Banks give loans to customers with this loan. The low repo rate means that many types of loans from the bank will become cheap. Whereas the reverse repo rate is the reverse of the repo rate. This is the rate at which banks get interest on deposits in RBI on their behalf. The reverse repo rate is used to control liquidity in the markets.
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