New Delhi [India], October 1 : In a unanimous decision, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the policy repo rate unchanged at 5.5 per cent in its policy announcement on Wednesday, RBI Governor Sanjay Malhotra said.
The governor informed that the MPC met on September 29 and 30, and October 1, to deliberate on the prevailing economic conditions and decide on the interest rate trajectory.
After a detailed assessment of the evolving macroeconomic outlook, the committee voted unanimously to maintain the repo rate at 5.5 per cent.
He stated, "The MPC voted unanimously to keep the policy repo rate unchanged at 5.5 per cent."
With this decision, the Standing Deposit Facility (SDF) rate also remains unchanged at 5.25 per cent. The Marginal Standing Facility (MSF) rate and the Bank Rate continue to stand at 5.75 per cent.
The Standing Deposit Facility (SDF) rate is the interest rate the RBI pays to banks that deposit their surplus, uncollateralized funds with the central bank on an overnight basis.
On the other hand, the Marginal Standing Facility (MSF) rate refers to the penal interest rate that scheduled commercial banks pay when they borrow overnight liquidity from the RBI as a last resort, particularly when funds are not available in the inter-bank market.
Highlighting the backdrop for the decision, Governor Malhotra said that since the August policy meeting, significant developments on the domestic front, amid a fast-changing global economic environment, have altered the growth and inflation narrative in India.
He stated, "Since the August policy meeting, significant developments on the domestic front amidst a fast-changing global economic landscape have altered the narrative on growth inflation dynamics in India. Buoyed by a good monsoon, the Indian economy continues to exhibit strength by registering a higher growth in Q1".
At the same time, the governor also pointed out that there has been a considerable moderation in headline inflation, providing comfort to the MPC in maintaining the current rate stance.
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