RBI Keeps Repo Rate Unchanged at 6.5% for Ninth Time
The Reserve Bank of India (RBI) has decided to keep the policy repo rate unchanged at 6.5% for the ninth consecutive time. This decision has been welcomed by economists and industry leaders who believe it provides stability and predictability in financial markets.
Economists’ Views
Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, mentioned that there might be a change in stance in the October policy, with potential rate cuts starting in December. Dharmakirti Joshi, Chief Economist at CRISIL, supported the RBI’s cautious approach, noting that domestic inflation is still a concern.
Industry Leaders’ Reactions
Niranjan Hiranandani, Chairman of NAREDCO and Hiranandani Group, stated that the RBI’s decision is a stabilizing force amid global economic uncertainties. Narinder Wadhwa, Managing Director and CEO of SKI Capital, also emphasized the importance of stability and predictability in financial markets during uncertain global conditions.
Global and Domestic Factors
While the European Central Bank and Bank of England have initiated rate cuts, the RBI remains cautious due to domestic inflation. Improved monsoon, larger kharif sowing, and easing of food inflation globally in July may influence the RBI to cut the rate in its October policy.
Doubts Revealed
RBI -: RBI stands for Reserve Bank of India. It is the central bank of India, which means it controls the money supply and interest rates in the country.
Repo Rate -: Repo rate is the interest rate at which the RBI lends money to commercial banks. If the repo rate is high, borrowing money becomes expensive for banks, and if it is low, borrowing becomes cheaper.
6.5% -: 6.5% is the current repo rate, which means banks have to pay 6.5% interest when they borrow money from the RBI.
Ninth Time -: Ninth time means that the RBI has decided to keep the repo rate the same for nine meetings in a row.
Economists -: Economists are experts who study how money and resources are used and distributed in society. They help understand the impact of financial decisions.
Industry Leaders -: Industry leaders are important people in business who make big decisions for companies. They often have a lot of experience and knowledge about their industry.
Upasna Bhardwaj -: Upasna Bhardwaj is an expert from Kotak Mahindra Bank, which is a big bank in India. She supports the RBI’s decision.
Dharmakirti Joshi -: Dharmakirti Joshi is an expert from CRISIL, a company that provides ratings and research. He also supports the RBI’s decision.
Domestic Inflation -: Domestic inflation means the increase in prices of goods and services within India. High inflation can make things more expensive for people.
Global Economic Uncertainties -: Global economic uncertainties refer to unpredictable changes in the world economy that can affect countries, including India.
Geopolitical Factors -: Geopolitical factors are events related to politics and geography, like conflicts between countries, that can impact the economy.