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RBI Governor Shaktikanta Das will announce the decision taken in the meeting on December 6 at 10 am
The meeting of the Monetary Policy Committee has started today i.e. from 4th December to take decision on interest rates. Reserve Bank of India i.e. RBI Governor Shaktikanta Das will announce the decision taken in the meeting on December 6 at 10 am.
RBI has kept the repo rate unchanged at 6.5% from February 2023. Market analysts and economists expect the central bank to maintain its current stance to bring India's inflation closer to its target level.
The MPC has 6 members, three of whom are central bank Governor Shaktikanta Das, Deputy Governor Michael Patra and Executive Director Rajeev Ranjan. The government appointed three new external members to the committee on October 1, including Ram Singh, Saugata Bhattacharya and Nagesh Kumar.
The last meeting of the Monetary Policy Committee was held in October. The last meeting of the Monetary Policy Committee was held in October, in which the committee did not change the rates for the 10th consecutive time. Now no change in interest rates is expected in this meeting also. This meeting takes place every two months.
Reserve Bank increased interest rates by 1.10% 5 times since 2020 The Reserve Bank of India (RBI) cut interest rates by 0.40% twice during Corona (27 March 2020 to 9 October 2020). After this, in the next 10 meetings, the Central Bank increased interest rates 5 times, made no change four times and once cut it by 0.50% in August 2022. Before Covid, the repo rate was at 5.15% on 6 February 2020.
Policy rate is a powerful tool to fight inflationAny central bank has a powerful tool to fight inflation in the form of the policy rate. When inflation is very high, the Central Bank tries to reduce money flow in the economy by increasing the policy rate.
If the policy rate is high then the loan that banks get from the Central Bank will be expensive. In return, banks make loans costlier for their customers. This reduces money flow in the economy. If money flow decreases, demand decreases and inflation decreases.
Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such a situation, the Central Bank reduces the policy rate. Due to this, the loan received by the banks from the Central Bank becomes cheaper and the customers also get the loan at a cheaper rate.
