The meeting of the Monetary Policy Committee of RBI will begin this week from August 4. The results of the meeting will be released on August 6.
reserve Bank of India
The meeting of the Monetary Policy Committee of the Reserve Bank of India (RBI) will begin this week from August 4. The results of the meeting will be released on August 6. The central bank is likely not to make any changes in key policy rates amid fears of a third wave of the COVID-19 epidemic and rising retail inflation. Interest rates are unlikely to rise.
Explain that the six-member MPC headed by RBI Governor Shaktikanta Das takes decisions on important policy rates. In the last meeting, the MPC did not make any changes in the interest rates.
What do experts say
Umesh Revankar, managing director and CEO of Shriram Transport Finance, said that despite high inflation, the central bank will maintain the repo rate at the current level. Revankar said, the rise in inflation is due to fuel prices, which will normalize in some time and the inflationary pressure will ease.
Deloitte India Economist Rumki Mazumdar said that after sharp recovery in some industrialized countries, higher commodity prices and increase in global prices will have an impact on the cost of production. He believes that the RBI will adopt the policy of wait and watch, because after this there is only limited scope for changes in monetary policy.
PwC India Leader-Economic Advisor Services Ranan Banerjee said that the US FOMC and other major monetary authorities have maintained the status quo. They said they can expect a similar status quo from the MPC as well.
The Reserve Bank, which primarily factors in retail inflation while arriving at its monetary policy, has been mandated by the government to keep consumer price index (CPI)-based inflation at 4 per cent with a margin of 2 per cent.
No change in interest rates for the sixth time in a row
In June, the consumer price index (CPI) based inflation stood at 6.26 per cent. In the previous month it was at 6.3 per cent. After the June MPC meeting, the Reserve Bank of India had left the benchmark interest rate unchanged at 4 per cent. This was the sixth time in a row that the MPC maintained the status quo on the interest rate.
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