The RBI repo rate, which has stayed steady at 6.5 percent for the past nine MPC sessions, is once again the key topic of discussion, according to experts. But it’s probably going to stay the same this time as well.
RBI MPC Meeting: On Wednesday, the Reserve Bank of India (RBI) began its three-day Monetary Policy Committee (MPC) meeting. The country’s GDP growth is at its lowest level in over two years, and the country’s inflation rate has beyond the upper limit at the time of this RBI meeting.
According to the second quarter of FY 2025, the GDP increased by 5.4%. Meanwhile, the RBI’s estimate of 4.8 percent was lower than the Consumer Price Index (CPI), which was 6.21 percent in October.
By striking a balance between inflation and economic growth, the central bank will attempt to quicken the nation’s economic pace during this meeting. The repo rate, which has stayed steady at 6.5 percent for the past nine MPC sessions, is once again the key topic of discussion, according to experts. It’s probably going to stay the same this time as well.
No possibility of reducing the repo rate
In its note, Emkay Global Financial Services predicted that inflation would rise and the RBI’s growth prediction would fall. Therefore, a reduction in the repo rate is not possible. Bajaj Broking Research claims that the RBI wants to keep inflation under control without sacrificing economic growth.
“India’s GDP is still robust,” the brokerage stated. “A ‘neutral’ stance will reflect a balanced economic outlook in such a situation, and the policy balance between growth and inflation will be important.” It further said that the outcome of this meeting will be closely watched by the market and analysts, as it will provide further guidance on RBI’s approach to managing the complex dynamics of growth and inflation.
22 months ago was the last modification
For FY25, this is the fifth MPC meeting. The RBI maintained its “neutral” stance and the repo rate at 6.5 percent during the most recent meeting. The RBI last adjusted the repo rate in February 2023. The central bank had raised the repo rate by 0.25 percent at that point. The repo rate hasn’t changed since then.
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