Mumbai:- The Reserve Bank of India has not changed any interest rates as expected on Wednesday. This decision has been taken in view of the ceasefire after the six-week war between the US and Israel against Iran and the hope of improving the situation around the world.
This is the first monetary policy review after the government announced a new inflation target for the RBI last month. The government has asked the RBI to keep retail inflation at 4 percent (with a margin of 2 percent above or below) for the next five years till March 2031.
Announcing the first monetary policy of this financial year, RBI Governor Sanjay Malhotra said that the Monetary Policy Committee has decided to keep the repo rate at 5.25 percent with the consensus of all.
The decision not to cut interest rates was taken due to consumer price index-based retail inflation, which was 3.21 per cent in February and was close to the RBI's target of 4 per cent.
This policy decision has been taken at a time when the month-and-a-half-long war in West Asia has disrupted oil supplies and increased crude oil prices. This has increased inflation and the economic burden on oil-importing countries like India.
In addition, the rupee had depreciated by more than 4 per cent since the war began, making it more expensive to import goods and raising fears of inflation. However, the rupee has strengthened by 50 paise to 92.56 against the US dollar after the announcement of a ceasefire between the US and Iran. Last month, the rupee had hit a historic low and crossed the 95 mark against the dollar.