The good news, the repo rate remains unchanged at 6.5 percent. In bi-monthly monetary policy meetings, RBI Governor Shaktikanta Das announced to keep the repo rate unchanged at 6.5%, repo rate is a short-term loan given to the commercial bank by RBI.
This is the ninth consecutive time RBI has kept the repo rate the same. As the interest rate is steady borrowing and EMI payments will become manageable.
RBI Governor also projected the real GDP growth at 7.2% for the current financial year and CPI inflation For the financial year at 4.4%.
Highlights of the Monetary policy meeting:
- RBI keeps the repo rate at 6.5%, the standing deposit facility rate (SDF) at 6.25 the marginal standing facility rate (MSF), and the Bank Rate at 6.75%
- Shaktikanta Das has said the MPC has decided to keep its focus on supporting price stability and inflation to ensure growth.
- The real GDP For FY25 is forecasted at 7.2 % for Q2 at 7.2%, for Q3 at 7.3%, and for Q4 at 7.2% and also for Q1 FY26 at 7.2%
- Forex Reserve of India is at a new high of $675bn.
- UPI tax payment limit hiked from 1L to 5L per transaction.
- RBI also decided to increase the frequency of credit information reporting by (CIs) credit institutions to (CIC) credit information companies from a monthly basis to a short-term basis.
RBI is the central bank of India and is also known as a banker’s bank. RBI Act of 1934 established the Reserve Bank and it started its operation in 1935.
The Central office of the Reserve Bank was established in Calcutta at first, but it was permanently moved to Mumbai in 1937. Reserve Bank was nationalised in 1949.
The Central Government nominates 14 Directors, including 1 Director each from the 4 Local Boards, and the other 10 Directors represent different sectors of the economy. All these appointments are made for 4 years.
RBI performs its supervision under the guidance of the Board of Financial Supervision(BFS). BFS was constituted in Nov 1994 as a committee of the Central Board of Directors of the Reserve Bank of India.
The objective was to undertake overall supervision of the financial sector, which consisted of commercial banks, financial institutions, and non-banking finance companies.
It Formulates, Implement and monitors monetary policy. It maintains price stability by increasing or decreasing monetary rates.
Manages the Foreign Exchange under the Foreign Exchange Management Act, of 1999. Issues and exchanges or destroys currencies and coins that are not fit for circulation.
Maintains banking accounts of all scheduled banks, performs merchant banking functions for the central and state governments, and acts as their banker.
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