The Reserve Bank of India (RBI) has decided to keep the benchmark repo rate unchanged at 5.25%, as expected by the market. The decision was announced by RBI Governor Sanjay Malhotra after the Monetary Policy Committee (MPC) meeting.
All six members of the MPC unanimously voted to keep the repo rate unchanged. The committee also retained its “neutral” policy stance, which means future decisions will depend on how the economy and inflation perform.
Explaining the decision, Governor Sanjay Malhotra said that global crude oil prices, currencies and financial markets remain volatile due to the ongoing conflict in West Asia. Because of this uncertainty, the RBI has decided to wait for more clarity before making any changes to interest rates.
The RBI’s decision comes at a time when inflation has increased slightly because of higher food and fuel prices. However, inflation is still within the RBI’s comfort range, giving the central bank room to monitor the situation before taking further action.
Since the repo rate remains unchanged, people with repo rate-linked home loans, car loans and other floating-rate loans are unlikely to see any immediate change in their monthly EMIs. Banks are also expected to keep lending and deposit rates largely unchanged for now.
Reacting to the decision, Yashank Wason, Managing Director of Royal Green Realty, said that keeping the repo rate unchanged is good news for the real estate sector. He said stable interest rates will help homebuyers by keeping EMIs affordable, while developers will benefit from smoother project launches and timely completion of projects.
The RBI has made it clear that its future policy decisions will depend on inflation trends, global developments and overall economic conditions.
