New Delhi: There will be no change in the repo rate, announced by Reserve Bank of India (RBI) Governor Shaktikanta Das after the meeting of the Reserve Bank’s Monetary Policy Committee (MPC) today. This festive season, people will find no relief on EMI.
Governor Shaktikanta Das said, “There will be no change in the repo rate, which means the repo rate will remain at four %. However, it was expected that RBI might further cut the repo rate in order to increase the demand ahead of festive season. Last year, in August no changes were made in the Repo rate by MPC. Meanwhile the central bank had cut the repo rate by 1.15 % in the last two meetings. Currently, the repo rate is four percent, reverse repo rate is 3.35 %.
Further RBI Governor pointed out that the GDP is expected to turn positive in the last quarter of the current financial year. The growth is being seen in all sectors, now more focus is on revival of the economy than preventing COVID-19. The GDP growth is estimated to be negative at 9.5 %. The governor has approved a loan of Rs 7.5 crore for small borrowers. “The weightage on new housing loans has been reduced. It is proposed to implement RTGS 24 hours to promote digital payment”, said the Governor.
On the dynamics of an open market operation (OMO), RBI Governor said that our focus is on making finance easier and increasing growth. Keeping this goal in mind, next week, OMO will do an open market operation of Rs 20,000 crore.
The central banks buy and sell government security and treasury bills under OMO. When the RBI wants to increase the money supply in the economy, it buys government security in the market. RBI to control liquidity in the economy sells government security in the market.
Earlier, the Monetary Policy Committee (MPC) was supposed to be concluded on 28 September. However, it was postponed due to the appointment of members of the committee. The government appointed eminent economists Ashima Goyal, Jayant R Verma and Shashank Shinde as three members in the MPC. These members have been appointed in place of Chetan Ghate, Pami Dua, Ravindra Dholakia after the maturity of the term in September.