Rate Cut was a No-Show

Both the repo and reverse repo rates remain unchanged after the latest monetary policy review, keeping it at 5.15% and 4.90% respectively. With FD rates earning less than other comparable fixed-income investments, schemes for senior citizens like Post Office Term Deposit and Senior Citizens’ Saving scheme are earning slightly higher returns than FDs currently. With no change in the repo rate, borrowers whose loans are linked to the external benchmark regime will continue to pay the same amount EMI.

The decision body pinpoints inflation for this unpredicted call. Retail inflation for the month of October breached RBI’s medium-term target of 4% for the first time since July 2018 due to higher food prices even though RBI had predicted that food prices “are likely to moderate as winter supplies enter the market.”

What are your thoughts on the Central Bank’s stance amid rising concerns of a slowdown in the economy and spiraling growth rates?

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