After the United States, China’s central bank also cut interest rates to stimulate the economy, leading to a surge in its stock market. This shift has prompted foreign investors to withdraw from the Indian market in favor of investments in China, negatively impacting Indian stocks. Concurrently, the Reserve Bank of India (RBI) held its 51st Credit Policy Committee meeting from October 7 to 9, where it decided to keep the repo rate unchanged. This means that customers will have to wait longer for potential relief from their EMI burdens.
Experts had anticipated that the RBI would not reduce the key repo rate at this week’s meeting. On Wednesday, Governor Shaktikanta Das confirmed that the repo rate remains at 6.5 percent, unchanged since February 2023. Das noted that five out of six committee members voted to maintain the rate, marking the tenth consecutive meeting with no change.
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When can relief be expected?
Earlier this month, the government restructured the RBI’s MPC, appointing three new external members, making this their first meeting. While the US Federal Reserve recently cut its benchmark rate by 0.5 percent and other countries also lowered rates, the RBI opted to keep its rates stable. Experts suggest there may be a possibility of a repo rate reduction in December.