The RBI did not change the repo rate for the second time in a row, thus hitting the common man

New delhi date. 06 February 2020, Thursday

The RBI did not change the repo rate in the second consecutive monetary review meeting. It has been kept unchanged at 5.15%. With this RBI decision, the interest rate of the loan and your EMI are less likely. Earlier in December, the central bank did not change the repo rate. At the same time, in the five monetary review meetings of the beginning of 2019, the repo rate was reduced five times.

Let's say the repo rate is currently stable at 5.15 percent. In addition, the reverse repo rate remains unchanged at 4.90%. The Reserve Bank has kept the cash reserve ratio ie CRR at 4% and SLR at 18.5%. At the same time, RBI Bank estimates that GDP growth will be 6% in FY 2020-21.

The repo rate is the rate at which banks provide RBI funds and, on the basis of this fund, the bank provides interest rate relief to consumers. However, banks did not benefit from the expected benefit from the reduction in RBI repo rate. This is the reason why RBI has also talked about giving banks the benefit of reducing repo rate to consumers.

Due to this there was no decrease in repo rate

In fact, research on inflation figures and budget deficit targets led to pressure on the RBI. Let us say that the government has raised the GDP rate to 3.8 percent for the current fiscal year. Earlier, the target of fiscal deficit was set at 3.3 per cent. Retail inflation stood at 7.3 per cent in December. The reason for this is the increase in prices of vegetables, especially onions and tomatoes. That's more than RBI hopes.