Wed Oct 09 06:26:44 UTC 2024: ## RBI Holds Interest Rates Steady Despite Expectations of a Cut

**MUMBAI, INDIA** – The Reserve Bank of India (RBI) has decided to keep key interest rates unchanged, disappointing those who were hoping for a reduction. The repo rate, the benchmark lending rate, will remain at 6.5%, marking the tenth consecutive meeting where the RBI has opted for a status quo. This means that interest rates have remained stable since February 2023.

The decision was announced by RBI Governor Shaktikanta Das following a meeting of the Monetary Policy Committee (MPC). The Governor stated that a majority of the MPC members, five out of six, voted to keep the repo rate unchanged.

While the RBI has set a target of controlling inflation at 4.5%, it chose to maintain the current repo rate despite retail inflation falling below the 4% tolerance band in July and August. The RBI Governor cited global uncertainties as the primary concern for inflation, highlighting a recent rise in the prices of commodities and food items.

The RBI anticipates that retail inflation will rise significantly due to the base effect. The bank forecasts inflation to be at 4.1% in the second quarter of 2024-25, 4.8% in the third quarter, and 4.2% in the fourth quarter.

This decision has disappointed many bank customers who were hoping for a reduction in interest rates, especially after the Federal Reserve cut its interest rate. Many hoped for lower EMI payments leading up to the upcoming festive season.

The RBI’s continued focus on managing inflation has come at the cost of holding interest rates steady, a move that may impact the growth of the Indian economy. The RBI has been actively monitoring the global economic situation and will continue to assess the need for adjustments in its monetary policy in the future.

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