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RBI has not made any change in the interest rates this time too. It is worth noting that there has been no change in the interest rate since the last 8 meetings. This time too, giving relief to the people, the Reserve Bank has kept the repo rate at 6.5 percent and no change has been made in it.
There was a change in repo rate in February 2023
According to reports, this time too the policy rate (repo rate) may remain unchanged. That is, no change in the rate is expected. This is the second MPC meeting of the new financial year and at present the repo rate is stable at 6.50 percent. The Reserve Bank last revised the interest rate in February 2023, increasing it by 25 basis points to 6.50 percent. No change has been made since then.
Effect of repo rate on EMI
RBI's MPC meets every two months and six members including Reserve Bank Governor Shaktikanta Das discuss inflation and other issues and changes (changes in rules). Let us tell you that the repo rate is directly related to the customers taking loan from the bank. Its decrease reduces the EMI of the loan and its increase increases the EMI. Actually, the repo rate is the rate at which the central bank of a country lends money to commercial banks in case of shortage of funds. The repo rate is used by the monetary authority to control inflation.
A look at the inflation figures
The inflation rate data for May will be released at the end of this month. According to SBI Research, inflation is expected to remain below 5 percent from October to the end of FY 2024-25. Earlier, wholesale inflation rose to 1.26% in April, the highest level in 13 months. Apart from this, retail inflation stood at 4.83 percent in April.
In the last financial year, the repo rate was changed 6 times
This is the second meeting of the MPC in the new financial year and the repo rate was kept stable in the first meeting as well. However, in the last financial year 2022-23, the repo rate was increased six times. At that time, to control inflation, the RBI increased the repo rate several times from 4 percent to 2.50 percent and in February 2023 it was increased to 6.50 percent.
