Mumbai: The apex bank in the country, the Reserve Bank of India (RBI) has released its bi-monthly monetary policy today. RBI has decided to keep the key policy rates unchanged. This is the sixth time in a row that the RBI has decided to keep the rates unchanged.
RBI has decided to keep the repo rate unchanged at 4% and the reverse repo rate at 3.35%. Repo is the rate at which RBI lends funds to l banks in the country. The reverse repo rate is the rate at which the RBI borrows from banks.
“The Monetary Policy Committee (MPC) voted to maintain status-quo ie repo rate remains unchanged at 4%. MCC also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and to mitigate the impact of Covid on the economy,” RBI governor Shaktikanta Das said in Mumbai.
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This decision by RBI is good news for home and auto loan borrowers as the banks will not increase the interest rates on loans any time soon. So loan EMIs of borrowers are likely to remain the same. Also, as the RBI kept the repo rate unchanged, there may not be further reduction in FD rates across the tenures by banks
The apex bank has also lowered its estimate for economic growth to 9.5% for the current fiscal from the earlier projection of 10.5%. The Marginal Standing Facility (MSF) rate and bank rates were also kept unchanged at 4.25%.