Reserve Bank of India (RBI) has decided to keep the repo rate unchanged in its bi-monthly monetary meet today. This is the third consecutive time when the repo rate has been kept unchanged.
The status quo on monetary policy was as expected by most economists, amid high levels of inflation.
“RBI maintains status quo third time in a row; keeps benchmark lending rate unchanged at 4 pc,” RBI Governor Shaktikanta Das said.
After the announcement, the repo rate and reverse rate remain at 4% and 3.35%, respectively. No change in policy rates means good news for fixed deposit (FD) investors as banks may not cut interest rates on FDs any further. State Bank of India (SBI) has not cut the interest rate on FDs since September 2020. Currently SBI gives 2.9% to 5.4% interest rate on FDs maturing in 7 days to 10 years. These are effective from 10 September 2020.
He further added, “committed to preserve depositors’ interest in financial system.”
With no change in the repo rate and reverse repo rate by the central bank, the likelihood of an immediate reduction in EMIs is less.
