RBI MPC Meeting: Finance Minister Nirmala Sitharaman presented the country's budget on February 1. The middle class has been given a big relief in the budget. The government announced that no tax will have to be paid on income up to Rs 12 lakh. Now after the announcements of tax relief in the budget, all eyes are on February 7. The meeting of the RBI's Monetary Policy Committee (RBI MPC) will run from 5 to 7 February. The decisions taken in the meeting will be announced on February 7.

After the announcement of tax exemption in the budget, the hope of a reduction in interest rates in the middle class has increased. If the RBI MPC decides to cut interest rates/repo rates, then this will reduce the burden of EMI from the middle class. Amidst signs of improvement in the economy and a return of softness in inflation, many experts are hoping that in this meeting RBI MPC can cut interest rates by 25 basis points.

The repo rate remains unchanged at 6.5 percent since February 2023

Let us tell you that the repo rate has been kept unchanged at 6.5 percent since February 2023. During this period, 11 meetings of the monetary policy have been held. The government has entrusted the RBI with the task of ensuring that the Consumer Price Index (CPI) based retail inflation remains at 4 percent (2 percent up or down).

Inflation connection of repo rate

It is worth noting that the repo rate is the rate at which the Reserve Bank gives loans to other banks. When banks get loans at a lower interest rate (low repo rate), they themselves can also reduce their interest rates to attract their customers, so that the number of customers willing to take loans increases. This will reduce the EMI of the customers.

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