InvestorQ : What is the recent RBI repo rate? Can we discuss the reason?
sarah Leo made post

What is the recent RBI repo rate? Can we discuss the reason?

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Rashi Mehra answered.
5 months ago
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The Reserve Bank of India's Monetary Policy Committee (MPC) announces to maintain the Repo Rate at 4%. It was quite an expected outcome for most analysts as it sets the key policy rates in India.

Year 2020 has been very challenging, says RBI Governor Shaktikanta Das. Reason? The 2 main factors - Inflation and Growth. Inflation in India kept elevating if the economy continued to contract. a) Higher inflation attracts tighter monetary policy means an increase in policy rates b) Falling economic growth attracts lower interest rates means encourage demand and economic activity.

India's economy is showing good signs of recovery than earlier anticipated. However, the process the growth is still in progress. Market analysts say, through the recent policy rate, RBI intends not to surprise markets negatively. RBI Governor forecasts CPI inflation to reach 6.8% for Q3, and may slide down to 5.8% for Q4.

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