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Key Points

The RBI's Monetary Policy Committee has decided to keep the repo rate steady at 5.5%. This unanimous decision was made after a detailed assessment of the current economic climate. Governor Sanjay Malhotra noted positive domestic developments, including a good monsoon and strong growth. A considerable moderation in headline inflation also supported the committee's stance.

Key Points: RBI MPC Unanimously Holds Repo Rate at 5.5 Percent

  • MPC held a three-day meeting to assess the evolving macroeconomic outlook and conditions
  • Committee decision was unanimous to maintain the current interest rate stance
  • SDF and MSF rates also remain unchanged following the repo rate decision
  • Governor highlighted a good monsoon and strong Q1 growth as positive domestic factors
  • Headline inflation has moderated considerably, providing comfort to the committee
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RBI keeps repo rate unchanged at 5.5%: Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra announces the MPC's unanimous decision to maintain the repo rate at 5.5%, citing domestic strength and moderated inflation.

"The MPC voted unanimously to keep the policy repo rate unchanged at 5.5 per cent. - RBI Governor Sanjay Malhotra"

New Delhi, October 1

In a unanimous decision, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the policy repo rate unchanged at 5.5 per cent in its policy announcement on Wednesday, RBI Governor Sanjay Malhotra said.

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.

He 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.

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.

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".

At the same time, the governor also pointed out that there has been a considerable moderation in headline inflation, providing comfort to the MPC in maintaining the current rate stance.

- ANI

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Reader Comments

R
Rohit P
As a small business owner, I appreciate this stability. The unchanged rates give us confidence to plan our expansion without worrying about sudden interest rate hikes affecting our loans.
A
Arjun K
While I understand the need for stability, I wish RBI had considered a small rate cut. Fixed deposit rates are already declining, and senior citizens depending on interest income are suffering. Just my respectful opinion.
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Sarah B
The unanimous decision shows strong consensus among MPC members. Good to see RBI considering both domestic factors and global economic changes. This balanced approach is what our economy needs right now.
V
Vikram M
The good monsoon mentioned by Governor Malhotra is indeed a blessing for our agricultural economy. This stability in rates combined with good harvest should boost rural demand. 🇮🇳
M
Michael C
Clear communication from RBI about the reasoning behind their decision. The explanation about SDF and MSF rates helps common people understand monetary policy better. Good transparency!

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