RBI Repo Rate: RBI Governor Sanjay Malhotra announced that the Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously decided to maintain the policy repo rate at 5.5 percent during its policy announcement on Wednesday.
The governor informed that the MPC met on September 29 and 30, and October 1, to deliberate on the prevailing economic conditions and decide on the interest rate trajectory. After a detailed assessment of the evolving macroeconomic outlook, the committee voted unanimously to maintain the repo rate at 5.5 per cent.
RBI Repo Rate: RBI Governor announced the new Repo rate at MPC
RBI Governor Sanjay Malhotra stated, “The MPC voted unanimously to keep the policy repo rate unchanged at 5.5 per cent.” With this decision, the Standing Deposit Facility (SDF) rate also remains unchanged at 5.25 per cent. The Marginal Standing Facility (MSF) rate and the Bank Rate continue to stand at 5.75 per cent.
Highlighting the backdrop for the decision, Governor Malhotra said that since the August policy meeting, significant developments on the domestic front, amid a fast-changing global economic environment, have altered the growth and inflation narrative in India.
He stated, “Since the August policy meeting, significant developments on the domestic front amidst a fast-changing global economic landscape have altered the narrative on growth inflation dynamics in India. Buoyed by a good monsoon, the Indian economy continues to exhibit strength by registering a higher growth in Q1″.
Simultaneously, the governor highlighted that there has been a significant easing in headline inflation, offering reassurance to the MPC in upholding the existing rate position.
RBI Repo Rate: What is Standing Deposit Facility?
The Standing Deposit Facility (SDF) rate is the interest rate the RBI pays to banks that deposit their surplus, uncollateralized funds with the central bank on an overnight basis. On the other hand, the Marginal Standing Facility (MSF) rate refers to the penal interest rate that scheduled commercial banks pay when they borrow overnight liquidity from the RBI as a last resort, particularly when funds are not available in the inter-bank market.
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