RBI Repo Rate Update | RBI Monetary Policy Meeting 2024 Udpate – Shaktikanta Das | Loan is not expensive, nor EMI will increase: RBI kept the repo rate at 6.5%, but there is a possibility of inflation increasing; This may reduce economic growth

RBI increased interest rates by 1.10% 5 times since 2020

The Reserve Bank of India (RBI) cut interest rates by 0.40% twice during Corona (27 March 2020 to 9 October 2020). After this, in the next 10 meetings, the Central Bank increased interest rates 5 times, made no change four times and once cut it by 0.50% in August 2022. Before Covid, the repo rate was at 5.15% on 6 February 2020.

4 out of 6 members of the committee are not in favor of change in interest rates.

There are 6 members in MPC, out of which 3 are RBI officials and the remaining 3 are members nominated by the government. RBI Governor Shaktikanta Das, Deputy Governor Michael Patra and Executive Director Rajeev Ranjan are already included. The government has appointed Ram Singh, Saugata Bhattacharya and Nagesh Kumar as external members in the committee on October 1.

RBI Governor said that 4 out of 6 members of the Monetary Policy Committee were not in favor of change in interest rates. Due to no change, the Standing Deposit Facility i.e. SDF rate remains at 6.25% and the Marginal Standing Facility i.e. MSF rate and Bank Rate remain at 6.75%.

Policy rate is a powerful tool to fight inflation

Any central bank has a powerful tool to fight inflation in the form of the policy rate. When inflation is very high, the Central Bank tries to reduce money flow in the economy by increasing the policy rate.

If the policy rate is high then the loan that banks get from the Central Bank will be expensive. In return, banks make loans costlier for their customers. This reduces money flow in the economy. If money flow decreases, demand decreases and inflation decreases.

Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such a situation, the Central Bank reduces the policy rate. Due to this, the loan received by the banks from the Central Bank becomes cheaper and the customers also get the loan at a cheaper rate.

RBI trending on Google

RBI Governor Shaktikanta Das informed about the decisions taken in the Monetary Policy Committee (MPC) meeting on Friday. After this news, RBI is being searched continuously on Google. If we also look at the Google trends of the last 30 days, it is clear that the graph of searching for RBI has increased.

Source- GOOGLE TRENDS

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