Wed Oct 09 06:10:38 UTC 2024: ## RBI Holds Repo Rate Steady at 6.5%, Disappointing Home Loan Borrowers
The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5% for the tenth consecutive time, dashing hopes of lower home loan EMIs. This decision was announced by RBI Governor Shaktikanta Das after the conclusion of the three-day bimonthly Monetary Policy Committee (MPC) meeting, which began on October 7th.
The last time the RBI adjusted the repo rate was in February 2023, when it was increased to 6.5%. The decision comes despite a 50-basis point cut in interest rates by the Federal Reserve in September, which had fueled expectations of a similar move by the RBI. Some analysts anticipate a potential interest rate cut in the December MPC meeting.
The repo rate, which is the rate at which the RBI lends money to banks, plays a significant role in determining the interest rates charged on loans like home loans, auto loans, and personal loans. A higher repo rate leads to higher borrowing costs for banks, which in turn translates into higher loan interest rates for consumers.
The RBI’s decision to maintain the repo rate at its current level signifies its commitment to maintaining price stability, considering factors such as inflation, demand, supply, and credit conditions. This decision, while providing some stability to the market, may continue to put pressure on borrowers seeking lower interest rates.
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