Home and car loan borrowers can breathe easy, as the Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.5%. This move is unlikely to affect existing loan EMIs, as the monetary policy committee (MPC) has maintained the current rate for the ninth consecutive time.
RBI Governor Shaktikanta Das announced, ‘The monetary policy committee decided by a 4:2 majority to keep the policy repo rate unchanged at 6.5%. Consequently, the standing deposit facility (SDF) rate remains at 6.25%, and the marginal standing facility (MSF) rate and the bank rate at 6.75%.’
The decision underscores the MPC’s ongoing strategy of ‘withdrawal of accommodation,’ aimed at steering inflation toward its target. Four out of six committee members supported this stance, reflecting a strong consensus on the need to focus on inflation control.
The current MPC, which has maintained the repo rate at 6.5% since February 2023, is poised for a major overhaul. The terms of the three external members—Shashanka Bhide, Ashima Goyal, and Jayanth R Varma—expire on October 6, with no renewal options. This shake-up will see the appointment of new external members later this year.
The remaining MPC members include RBI Governor Shaktikanta Das, whose term concludes in early December, Deputy Governor Michael Patra, whose contract extends to early January, and Executive Director Rajiv Ranjan.
As the central bank continues to balance inflation targets with economic growth, all eyes will be on the upcoming changes within the MPC.
