The results of the three-day meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will be announced today. The three-day meeting of the MPC began on 5 April.
Reserve Bank of India
The results of the three-day meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will be announced today. The three-day meeting of the MPC began on 5 April. Experts believe that the Reserve Bank cannot make any change in policy rates in the monetary review. Explain that RBI Governor Shaktikanta Das did not change the policy rate in the bi-monthly monetary policy review on February 5 and kept the repo rate at 4%.
Experts believe that the Reserve Bank will wait for a suitable opportunity to announce monetary action. This will allow it to keep retail inflation within the range of 4 per cent (2 per cent above or below) and at the same time ensure the best results by encouraging growth. Presently, the repo rate is 4 percent and the reverse repo rate is 3.35 percent.
The pace of improvement is still sluggish
Economic recovery is yet another and the pace of improvement is still sluggish. Apart from this, challenges have also increased due to increase in the cases of COVID-19. Edelweiss said that overall we estimate that policy rates will not be changed. However, the central bank will continue its soft stance.
There is a big challenge in front of the Reserve Bank at this time. Covid-19 cases are increasing in the country. This may put a ‘break’ on the recovery of the economy. Apart from this, the rate of inflation is also going up. Aggarwal said that the central bank will not change the repo rate in the policy review.
He said that at the moment the home loan rate is at its historic low. Many commercial banks have reduced interest rates recently. Further reduction in interest rates will help the industry and the overall economy.
Target to keep retail inflation within range
Despite increasing bond returns globally, the MPC will continue its soft stance in its upcoming meeting. The government last month gave a target to the Reserve Bank to keep retail inflation within the range of 4 per cent (up or down 2 per cent) for 5 years and till March 2026.
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