Everyone is currently expecting the loan interest rate to decrease. Will the repo rates be lowered this time by the Reserve Bank? Yesterday marks the beginning of the RBI monetary policy meeting. In two days, the findings will also be made public. However, there is no chance that the repo rates will drop this time.
Tuesday marks the beginning
of the Monetary Policy Committee (MPC) meeting, which is presided over by Governor Shaktikanta Das of the Reserve Bank of India (RBI). The short-term lending rates are anticipated to stay the same because retail inflation is still at record-high levels. February 2023 saw an increase in rates. For nearly a year, the Reserve Bank of India has maintained the short-term lending rate, or repo rate, at 6.5 percent. The last time interest rates were raised in response to world events was in February 2023, when they went from 6.25 percent to 6.5 percent.
Retail inflation hit a record high.
In July 2023, retail inflation hit a record high of 7.44 percent, but since then, it has decreased. December 2023 saw a decrease in retail inflation to 5.69 percent, which is below the RBI’s acceptable four percent (up or down two percent) threshold. The decision will be made on February 8th. The RBI Governor will make public the outcome of the February 8 MPC meeting. From May 2022 to February 2023, the MPC raised the repo rate by a total of 2.5 percent; however, it has stayed constant since then. There are three members of the RBI and three outsiders on this committee.
In June, there might be a cut.
Ashima Goyal, Jayant R. Verma, and Shashank Bhide are the panel’s external members. In addition to Governor Das, its members include Executive Director Rajiv Ranjan and Deputy Governor Michael Debabrata Patra. The State Bank of India (SBI) has already stated in a report that the RBI can continue with its current policy position during this review. The paper states that the policy rate cut is more likely to happen in the June-August period only.
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