People have been waiting for a long time for the reduction of EMI of all types of loans including home, car loan. RBI has not changed the repo rate for about two years. Due to this, the loan has not become cheaper. Now that inflation is under control, it is expected that interest rates will be reduced. Responding to the question asked about the loan becoming cheaper, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the reduction in the policy interest rate will depend on the long-term rate of inflation and not on monthly figures. The meeting of the Monetary Policy Committee (MPC) under the chairmanship of Das is to be held between October 7 and 9. A decision will be taken on the reduction in the policy rate in the meeting. In the monetary policy review in August, RBI had maintained the repo rate at 6.5 percent for the ninth consecutive time in view of high food inflation. In the August meeting, four out of six members of the MPC voted in favor of maintaining the status quo. Retail inflation within RBI’s target
The RBI governor said in an exclusive conversation with CNBC International that whether the inflation rate is increasing or decreasing, the focus will be on the monthly pace of inflation. The upcoming inflation growth rate will be seen with a positive attitude and the decision will be taken on the basis of assessment. He said, “The question is not that in the current context, like July, inflation came down to around 3.6 percent. This is a revised figure. In August it has come down to 3.7 percent. This shows what is the current state of inflation. Now we have to see what is the outlook on inflation for the next six months, next one year. Das said, “That is why, I would like to carefully see what is the pace of inflation and growth in the coming times and based on that we will take a decision.”
No clear answer on cut
When asked whether the RBI’s Monetary Policy Committee would actively consider cutting the policy rate in its meeting in October, Das said, “No, I cannot say anything about it.” He said, “We will discuss in the MPC and take a decision, but as far as the dynamics of growth and inflation are concerned, I would like to say two things. One, the pace of growth remains good, India’s growth story is intact. As far as the inflation outlook is concerned, we have to look at the monthly pace and a decision will be taken based on that.” Das said that the rupee has been one of the least volatile currencies globally, especially since the beginning of 2023. “The rupee has been very stable compared to the US dollar and the volatility index.” However, experts say that this time the RBI can also decide to cut interest rates.
The goal of keeping the rupee stable
He said, “Our declared policy is to prevent excessive volatility of the rupee. He said that keeping the rupee stable creates confidence in the market, investors and the economy.” Das said that the RBI is committed to maintaining financial stability and will continue to take necessary steps to ensure this.
