Policy Rates Unchanged 2024 : RBI
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), which met recently, decided to keep the repo rate – the main policy rate – unchanged at 6.5 per cent and maintain the policy stance of ‘withdrawal of accommodation’.
- Both the decisions were taken in a majority 5:1 voting by the six-member MPC, headed by RBI Governor Shaktikanta Das.
- The repo rate is the rate at which the RBI lends money to commercial banks in the event of any shortfall of funds. It is used by the RBI to control inflation.
- The current repo rate of 6.5% is the highest since August 2018, when it was at 6.5%.
- The RBI has raised the repo rate by a cumulative 250 basis points since May 2022 in the fight against inflation.
- The consumer price index (CPI) based retail inflation, which the RBI factors in while arriving at its monetary policy, is showing signs of moderation but still remains above the central bank’s upper tolerance level of 6%.
- In February 2023, retail inflation stood at 6.44%, compared to 6.52% in January
