RBI MPC Meet: The results of the monetary review meeting will come this week, what do experts have to say on the repo rate?
COVID-19 Amid fears of a third wave of pandemic and rising retail inflation reserve Bank of India May keep key policy rates unchanged this week. The bi-monthly three-day meeting of the Reserve Bank’s Monetary Policy Committee (MPC) is starting on August 4. The results of the meeting will come on August 6. Experts say that the central bank will look at the macroeconomic situation for some more time before taking any decisive action. The six-member MPC, headed by the Governor of the Reserve Bank, takes decisions on important policy rates. In the last meeting, the MPC kept the interest rates unchanged.
What do the experts say?
Rumki Mazumdar, Economist, Deloitte India, said, “After the sharp recovery in some industrialized countries, higher commodity prices and increase in global prices will have an impact on the cost of production. We believe that for now the Reserve Bank will adopt a watch and wait policy as there is only limited scope for change in monetary policy after that. Shriram Transport Finance Managing Director and Chief Executive Officer (CEO) Umesh Revankar said that despite high inflation, the central bank will maintain the repo rate at the current level.
PwC India Leader-Economic Advisory Services Ranan Banerjee said the US FOMC and other major monetary authorities have maintained the status quo. ‘We can expect similar status quo from MPC as well.
In the report of BofA Global Research, it has been said that the Monetary Policy Committee of the Reserve Bank will maintain the status quo in its review on August 6. However, the consumer price index-based inflation estimate may be raised by the MPC from 5.1 per cent. According to a research report by economist Radhika Rao of DBS Group Research, the six-member monetary policy committee will adopt a watch and wait approach in August.
Inflation based on the Consumer Price Index in June stood at 6.26 percent. In the previous month it was at 6.3 per cent.
(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)