RBI Monetary Policy Committee
The RBI Monetary Policy Committee of The Central Bank Of India has decided to continue with same repo rates to provide services to commercial banks. The decision is taken by Governor Shaktikanta Das on Friday in the first bi-monthly policy meeting of the fiscal year 2023. This decision is a little surprising as it is the 11th time when RBI has decided to continue with the same repo rate. With no change, the repo rate will continue to stand at 4 per cent, while reverse repo rates will be maintained at 3.35 per cent.
Mr Das said while announcing the MPC’s report, “We are not hostage to any rulebook. No action is off the table when the need is to safeguard the Indian economy.”
Further said Mahatma Gandhi’s quote, “It is faith that cheers us through stormy seas, faith that moves mountains, and faith that jumps across the ocean” while concluding the report.
Central Bank To Continue With “Accommodative” Stance
The Currency Central Bank is focused on reviving the growth and has decided to continue with the “accommodative” stance, said the bank. This means that RBI is now focusing on expanding the withdrawals to provide a boost to economic growth. Bank has shown its concern by not changing the repo rates and maintaining an accommodative stance over the last 10 meetings.
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Repo Rates And Reverse Repo Rates
Repo Rates are the interest rates at which a commercial bank withdraws money from RBI. Similarly, the Reverse Repo Rates are rates paid by RBI to commercial banks when they park their excess cash with the Central Bank.
Commercial banks seek help from RBI at repo rates, only when they notice a shortfall in their funds. And the Monetary Policy Committee (MPC) controls the flow of money in a country by using the reverse repo rates.
