RBI keeps key interest rate unchanged at 6 per cent
The six-member Monetary Policy Committee (MPC), headed by Reserve Bank of India Governor Urjit Patel, in its fifth bimonthly review, kept repo rate unchanged at 6 per cent and reverse repo at 5.75 per cent.
The Reserve Bank of India kept repo rate unchanged in its fifth bimonthly meeting today. The central bank's Monetary Policy Committee (MPC) voted 5:1 in favour of status quo. The reverse repo rate too remains unchanged at 5.75 per cent.
RBI was widely expected to keep the repo rate unchanged because inflation inched up to a 7-month high and improvement in quarterly GDP growth rate took the pressure off lowering interest rates further.
The government and business leaders, however, have been pushing RBI to lower rates to provide an impetus to private investment and boost broader economic growth that has shown signs of revival. The central bank, however, has been cautious due to rising inflation that's now at a seven-month high of 3.58 per cent. Though the rate is under the central bank's target of 4 per cent, its inflation forecast for remainder of the current financial year -- 4.3-4.7 per cent -- is what is bothering the central bank.
Repo rate is the rate at which banks the RBI lends to other banks and is considered the key policy rate. The only repo rate cut this year was in August when RBI reduced it by 25 basis points (0.25 per cent). The RBI kept the rates unchanged in its last meeting in October.
So if you have been waiting for your home loans to get cheaper, look out for signs in the next meeting of the MPC is scheduled on February 6 and 7, 2018.
With inputs from PTI