For the tenth time running, the RBI kept the repo rate at 6.50%.

INN/Mumbai, @Infodeaofficial

For the tenth time in a row, the RBI kept the repo rate at 6.50% in its bimonthly policy announcement today. Growth considerations and inflationary pressures combined to shape this decision.

By holding the repo rate at 6.50%, the Reserve Bank of India has stabilised borrowing costs. The Monetary Policy Committee also resolved to encourage growth while maintaining a “neutral” monetary policy stance and a clear focus on a long-term alignment of inflation with the objective.

In the upcoming months, the RBI predicted that inflation would stay over its target range of 2–6%, mostly as a result of increased food prices and changes in the price of commodities globally. Forecasts for GDP growth were modestly reduced lower to account for issues with domestic demand and uncertainty in the global economy.

The MPC kept its predictions for 4.5% inflation and 7.2% GDP growth in India for FY25. The “neutral” posture is seen by the industry as a sign that the central bank would cut interest rates in the coming months. The choice exhibits a well-rounded strategy, giving equal weight to both economic expansion and inflation management.

The RBI intends to increase the limitations on pre-payment fines among other things. This extension will cover loans obtained by micro and small businesses in addition to individual non-business loan customers. The RBI will now mandate that account holders confirm the beneficiary’s account before completing a transfer in order to prevent fraud and erroneous credits. The verification capability that is now available for UPI and IMPS will be extended to NEFT and RTGS transactions.