New Delhi. The US Federal Reserve has announced a 50 basis point reduction in interest rates for the first time in 4 years. The US Federal Reserve had been continuously increasing interest rates since the war between Russia and Ukraine began. This led to the interest rate in the US rising to 5 percent. After 23 years, the Federal Reserve has increased the interest rate in the US. Now the Federal Reserve has indicated that the interest rate may be reduced further in the coming times. In such a situation, now everyone’s eyes are on the Reserve Bank of India i.e. RBI. Ever since the Federal Reserve started increasing interest rates in the US, seeing the pressure on the economy and the rising inflation, the RBI also started increasing the repo rate and has not reduced the repo rate in the past few times.
RBI’s MPC or Monetary Policy Committee had increased the repo rate several times to 6.5 percent. This reduced the pressure on the economy and inflation also remained under control. However, this caused problems for those who took loans. Due to no reduction in the repo rate, the interest rate on the loan which increased once has not come down till now. On the other hand, those who made FDs or other types of investments in banks got more interest due to the increase in repo rate and they had a great time. Now everyone’s eyes are on whether RBI will also reduce the repo rate after the US Federal Reserve reduced the interest rate?
In this regard, Srinivasulu Reddy, Chairman of State Bank of India (SBI), on being asked by news agency PTI, said that at present there is no possibility of RBI reducing the repo rate. The reason for this is also inflation. Apart from the statement of the SBI Chairman, there are some other factors due to which there is no possibility of RBI reducing the repo rate in the coming time. The stock market is also one of these factors. Ever since the Federal Reserve increased the interest rate in America, the Indian stock market has also seen a continuous rise and it has reached new heights. In such a situation, now it remains to be seen whether a decision is taken to reduce the repo rate in the next meeting of RBI’s MPC or not?
