RBI MPC Meeting 2023 | Latest News on the RBI Repo Rate Hike
There was no change in the swap rate
No change in interest rate The RBI (Reserve Bank of India) has agreed that the repo rate will not go up on Thursday. So, the interest rate will stay at 6.50 percent. RBI had raised the repo rate six times in a row before.
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Every two months, monetary policy is discussed. In April 2022, the first meeting of the last fiscal year 2022-23 took place. The RBI kept the repo rate at 4%, but on May 2 and 3, it called an emergency meeting and raised the repo rate by 0.40 percentage points, to 4.40 percent.
No change in interest rate: Repo rate will stay at 6.50 percent
The repo rate changed on or after May 22, 2020. After this, the repo rate went up by 0.50% at a meeting from June 6 to June 8. This made the repo rate go up from 4.40 percent to 4.90 percent. Then, in August, it went up by 0.50 percent, making it 5.40 percent.
In September, the interest rate went up to 5.90%. Then, in December, the rates went up to 6.25 percent. No change in interest rate After that, the interest rates were raised from 6.25 percent to 6.5 percent at the last monetary policy meeting for the fiscal year 2022-23, which was held in February.
Why not: RBI wants to keep the economy’s rebound going as it is
RBI Governor said that we haven’t changed the policy rate because we want to keep the economy’s rebound going, but if we need to, we’ll do what we need to do. Even with all the trouble in the world, India’s economy is still doing well.
What will happen is that loans won’t be as expensive and EMIs won’t change
With the repo rate, RBI has a strong tool to fight inflation. When inflation is very high, the RBI raises the repo rate to try to slow down the flow of money in the economy. If the swap rate is high, banks will have to pay more for loans from the RBI. No change in interest rate In return, banks will charge their users more for loans. This will slow the flow of money through the market. If the flow of money goes down, demand will go down and inflation will go down.
In the same way, when the business is in a bad spot, there needs to be more money coming in for it to get better. In this case, the RBI will lower the exchange rate. Because of this, the banks can get loans from the RBI at lower rates, and so can their users. Let’s use this case to help us understand.No change in interest rate During the Corona time, when the economy stopped moving, there was a drop in demand. In this case, RBI cut interest rates to make more money flow through the economy.
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RBI’s goal for inflation has not been reached
The head of RBI said that inflation is still higher than what RBI wants it to be. The head of the RBI said that India’s banking and NBFC sectors were very strong. No change in interest rate He also said he hoped that a better rabi crop would help boost demand in the countryside.
Regarding the rupee, the head of the RBI said that the rupee has moved in a very planned way in 2022 and that this is likely to continue in 2023. He said that the RBI is always thinking about keeping the dollar strong and stable.
Are you aware of what the rising numbers say?
Inflation at stores was 6.44% in February
In February, retail inflation in the country went down to 6.44 percent. It was at a three-month high of 6.52% in January 2023 and at a three-month low of 5.72% in December 2022. In November 2022, there was 5.88% inflation at stores. In February of last year, it was 6.07%.
Inflation based on the WPI was 8.39%
In February, the Wholesale Inflation Rate (WPI) went down to 3.85%. It hasn’t been this low in 25 months. In January 2023, the market inflation rate was 4.73 percent. The wholesale inflation rate in December was 4.95 percent. Due to the low prices of things like potatoes, onions and gas, inflation has gone down.
What is the effect of inflation?
Buying power is directly linked to inflation. For instance, if inflation is 7%, every Rs 100 you make will only be worth Rs 93. Because of this, people should buy with inflation in mind. Otherwise, your money will be worth less.