Fri Dec 06 07:58:02 UTC 2024: ## RBI Holds Repo Rate Steady at 6.5% for the Eleventh Consecutive Time
**Mumbai, December 9, 2024** – The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) concluded its three-day meeting today, announcing a decision to maintain the repo rate at 6.5%. This marks the eleventh consecutive time the rate has remained unchanged. The decision, reached by a 4-2 vote within the six-member committee, comes amidst significant economic challenges.
RBI Governor Shaktikanta Das attributed the decision to the broader impact of monetary policy and the importance of price stability for all sectors of society, while maintaining a focus on economic growth. The RBI will maintain its monetary policy stance as “neutral.”
While the repo rate remains unchanged, the RBI has revised its economic growth forecast for the current fiscal year downwards from 7.2% to 6.6%, citing softening indicators in the second quarter. However, the central bank has also upwardly revised its retail inflation projection for FY25 to 4.8% from the earlier estimate of 4.5%, primarily due to persistent pressure from food prices, particularly in the third quarter. The RBI anticipates relief from the Rabi harvest.
The repo rate, the rate at which commercial banks borrow from the central bank, is a key tool used by the RBI to control inflation. The decision to hold the rate steady is likely to minimize changes to EMIs (Equated Monthly Installments) for various loans, including home and auto loans. The stock market opened relatively flat in anticipation of the MPC’s announcement.
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