RBI MPC: Due to the uncertainty created due to the second wave of the COVID-19 pandemic, policy rates may remain intact.
Reserve Bank of India (RBI) Governor Shaktikanta Das will announce the outcome of the Monetary Policy Review (MPC) meeting at 10 am today. Policy rates may remain intact due to the uncertainty created by the second wave of the COVID-19 pandemic. There is little hope of any change in interest rates from the MPC due to fears of a pick-up in inflation. The three-day meeting of the Monetary Policy Committee (MPC) of RBI began on Wednesday. Monetary policy review meetings are held every two months.
RBI did not make any change in key interest rates in the last MPC meeting held in April. At present, the repo rate is at 4 percent and the reverse repo rate is at 3.35 percent.
RBI to continue with accommodative monetary policy stance
Market experts believe that the better-than-expected GDP figures have given some relief to the MPC on the growth front. However, downside risks to growth have intensified due to restrictions such as partial lockdowns imposed in many parts of the country. In such a situation, it is likely that the RBI will continue its accommodative monetary policy stance and keep the repo rate at 4 per cent with a cautious approach.
The RBI can maintain its accommodative stance without jeopardizing its core goal of controlling inflation. Reviving growth has become an important objective due to the economic loss caused by the recent lockdown.
RBI should also consider providing more liquidity to National Housing Bank to bring stability to housing finance companies, which will lead to expansion of the real estate sector.
read this also- Big interest is available on buying government gold, together with these 5 great benefits