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The RBI on Wednesday took a major decision not to raise bank lending rates. The RBI has kept the repo rate unchanged at 4 per cent, which means there will be no increase in the borrower’s EMI for the time being. The repo rate is the rate at which a rise or fall has a direct effect on the debtor.
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has fixed policy rates for the 10th consecutive meeting. The meeting comes at a time when there has been pressure to raise interest rates after remaining stable for more than a year and a half. On the other hand, Corona’s new Omicron variant has once again added to the economic challenges. The MPC has kept the repo rate at four per cent. The reverse repo rate remains unchanged at 3.35 per cent. The Reserve Bank has decided to take a more proactive approach to support the economy.
However, in the current scenario, market experts were already expecting that RBI Governor Shaktikant Das would not make any change in the policy rate like last time. This is the 10th consecutive meeting of the Reserve Bank’s MPC in which no change in policy rates has been made. The repo rate is at a historic low since May 2020. At its May 2020 meeting, the RBI cut the repo rate to 4 percent, its lowest level in 21 years. However, the meeting has put pressure on the Reserve Bank to control inflation. Inflation has been bothering the common man for the last three-four months. Most economists are of the opinion that the risk of Omicron at this time outweighs the pressure of inflation.
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