The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Wednesday kept the policy repo rate steady at 5.5 per cent as it concluded its three-day meeting, reports ANI. The decision was made through a unanimous vote.
RBI Governor Sanjay Malhotra said the committee met on 29 and 30 September and 1 October to review economic conditions and determine the interest rate trajectory. “The MPC voted unanimously to keep the policy repo rate unchanged at 5.5 per cent,” he stated.
Other key rates remain unchanged
With the repo rate unchanged, the Standing Deposit Facility (SDF) rate remains at 5.25 per cent, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue to stand at 5.75 per cent.The SDF rate is the interest rate paid by the RBI to banks that deposit surplus, uncollateralised funds overnight. The MSF rate is the penal interest rate banks pay when borrowing overnight liquidity from the RBI, usually as a last resort when funds are not available in the inter-bank market.
Governor Malhotra stated that developments on the domestic front, along with changes in the global economic environment, have impacted growth and inflation in India since the August policy meeting.
“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,” he said.
He also noted that there has been a moderation in headline inflation, which supported the MPC’s decision to maintain the current rate stance.
