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What is the historical trend of Repo Rate in the economy?

Curious about Repo Rate

What is the historical trend of Repo Rate in the economy?

The historical trend of the Repo Rate in the Indian economy has seen fluctuations over the years. The Repo Rate is set by the Reserve Bank of India (RBI) based on various factors such as inflation, economic growth, and monetary policy objectives. Here is a general overview of the historical trend of the Repo Rate in recent years:

1. Pre2010: Prior to 2010, the Repo Rate experienced various ups and downs in response to economic conditions. During this period, the Repo Rate ranged from single digits to double digits, depending on the prevailing economic circumstances and inflationary pressures.

2. Post2010: In the aftermath of the global financial crisis, the RBI pursued a tightening monetary policy stance to combat inflationary pressures. The Repo Rate increased significantly during this period, reaching its peak in 20112012 at around 8.5% to 9%.

3. 20132014: From mid2013 to early 2014, the RBI embarked on a phase of monetary policy easing as inflation moderated. The Repo Rate was gradually reduced during this period to stimulate economic growth and support investment.

4. 20142019: In this period, the Repo Rate witnessed a mix of rate hikes and cuts. The RBI closely monitored inflation and economic indicators to determine its monetary policy stance. Overall, there were periods of both tightening and easing, with the Repo Rate ranging from around 6% to 8% during this time.

5. 20202021: The outbreak of the COVID19 pandemic led to significant disruptions in the economy, prompting the RBI to adopt an accommodative monetary policy stance. To support economic recovery, the Repo Rate was reduced multiple times during this period. By mid2021, the Repo Rate reached historic lows, dropping to around 4%.

It's important to note that the historical trend of the Repo Rate is subject to change based on evolving economic conditions, inflationary pressures, and monetary policy objectives. The RBI regularly reviews and adjusts the Repo Rate to maintain price stability and support sustainable economic growth.

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