RBI keeps lending rate unchanged, no relief for home loan borrowers
The Reserve Bank of India (RBI) has opted to maintain the repo rates unchanged at 6.5 per cent for the sixth consecutive time.
The repo rate, which stands as the interest rate at which RBI lends to other banks, remains steady following the conclusion of the three-day RBI’s monetary policy committee meeting from February 6 to 8.
This decision is part of the RBI’s regular bi-monthly meetings aimed at determining various key financial parameters including interest rates, money supply, inflation outlook, and other macroeconomic indicators.
In the announcement of the bi-monthly monetary policy, RBI Governor Shaktikanta Das stated that the Monetary Policy Committee (MPC) has chosen to keep the repo rate unchanged at 6.5 per cent.
Das also highlighted the MPC’s commitment to monitoring food inflation to safeguard the benefits acquired.
Impact on loan EMIs
With the repo rate staying the same, there probably won’t be any immediate changes to loan EMIs.
The RBI’s decision to maintain the lending rate unchanged is perceived as an attempt to strike a balance between curbing inflation and supporting economic growth.
In response to the RBI’s decision, experts in the financial sector have offered varied perspectives.
Sonam Srivastava, Founder and Fund Manager at Wright Research, highlighted the potential positive impact on equity markets due to lower borrowing costs, while bond markets may exhibit a subdued reaction.
“In sectors sensitive to interest rate movements, such as real estate and automobiles, the unchanged policy could offer relief by maintaining affordability for borrowers,” said Srivastava.