Reserve Bank kept the repo rate at 6.5%
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RBI Repo Rate: An important announcement regarding the repo rate has been made by the Reserve Bank of India on the last day of the Monetary Policy Committee (MPC) meeting under the bi-monthly review. Bank Governor Shaktikanta Das said that the apex bank has again kept the repo rate intact. This is the seventh time that the bank has kept the rate intact. As a result, the Standing Deposit Facility Rate remains at 6.25% and the Marginal Standing Facility Rate and Bank Rate remains at 6.75%. The meeting started on April 3. The six-member Monetary Policy Committee (MPC) meeting includes bank governors Shaktikanta Das, Rajiv Ranjan, Michael Debabrata Patra along with Shashank Bhide, Ashima Goyal and Jayant R Verma as external members.
Repo rate was changed in February 2023
The Reserve Bank last changed the rate in February 2023. Then the bank increased the interest rates by 0.25% to 6.5%. Before that, in the year 2022, the Reserve Bank had increased the repo rate by 2.50 percent six times. However, this time the bank’s decision has brought great relief to the common people. There is going to be no increase in the EMI of their loan.
Also Read: Market remained sluggish before the announcement of interest rates by Reserve Bank, Sensex-Nifty fell.
what is repo rate
repo rate (Repo Rate) is an economic term used in the financial market. This term is the name given to the interest rate prescribed by the Reserve Bank of India (RBI) and other Indian banks against the reportable collateral required for borrowing from commercial banks and other financial institutions. RBI changes the repo rate to affect the availability of rupees and borrowing rates in the financial market. If the repo rate is increased then the financial institutions need to pay more interest to the RBI, due to which the financial institutions have to spend more in borrowing and they also have to spend more in lending to their customers. This makes it difficult to get a loan and reduces the possibility of borrowing at the rate. At the same time, if the repo rate is reduced then the financial institutions need to pay less interest to the RBI, which makes the borrowing rate lower and more attractive to borrow. This makes it easier to take loan and the financial institution is also available to lend to the customers. Therefore, repo rate plays an important role for banks and other financial institutions and its change impacts the market interest rates and credit availability.
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