Wed Oct 09 05:42:14 UTC 2024: ## RBI Holds Repo Rate Steady for the 10th Consecutive Time, Maintains Neutral Stance

**Mumbai, October 7, 2024:** The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.50% for the tenth consecutive time, a decision announced by Governor Shaktikanta Das following a two-day meeting of the Monetary Policy Committee (MPC). This means there will be no change in loan EMIs for the time being.

The MPC, which now includes three new members, voted 5-1 to maintain the status quo, citing the need to carefully assess global economic conditions and their impact on the Indian economy. The RBI has also shifted its policy stance from “withdrawal of accommodation” to “neutral,” indicating a balanced approach towards managing inflation and growth.

Despite global economic uncertainty, India has managed to keep inflation under control while simultaneously supporting economic growth, Das emphasized.

The repo rate, which is the rate at which the RBI lends money to commercial banks, has a direct impact on loan interest rates. A reduction in the repo rate leads to lower EMIs, while an increase results in higher EMIs.

The RBI has been carefully managing the repo rate since May 2022, when it began a series of increases to combat rising inflation. The rate had been increased by 2.5% since then before being held steady.

The MPC also announced revised GDP growth forecasts for FY2025. The growth rate for the second quarter of FY2025 was revised down to 7% from 7.2%, while the growth rate for the third quarter was revised upwards to 7.4% from 7.3%. The growth rate for the fourth quarter was also revised upwards to 7.4% from 7.2%. The RBI expects the economy to grow at 7.3% in the first quarter of FY2026.

The RBI has maintained its retail inflation forecast for FY25 at 4.5%, with the forecasts for the individual quarters set at 4.1%, 4.8%, and 4.2% for Q2, Q3, and Q4 respectively. The inflation rate is expected to be 4.3% in the first quarter of FY2026.

The decision to hold the repo rate steady was welcomed by the stock market, with the BSE Sensex surging over 400 points and the BSE Nifty crossing 25,190. The decision was seen as a positive sign for the Indian economy, particularly amidst ongoing global tensions.

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