New Delhi: The Reserve Bank of India (RBI) can keep the policy rates as it is in the upcoming monetary policy review. The three-day meeting of the Monetary Policy Committee (MPC), headed by Reserve Bank Governor Shaktikanta Das, will begin on February 3 and the results of the meeting will be announced on February 5. Experts believe that the Reserve Bank will avoid changes in interest rates. However, he will maintain his soft stance. Explain that Finance Minister Nirmala Sitharaman will present the general budget in the Lok Sabha on February 1. In such a situation, the monetary policy committee of the Reserve Bank will also take direction from the budget proposals.
“We anticipate that the MPC will maintain the status quo on the interest rates front,” said M Govinda Rao, chief economic advisor, Brickwork Ratings. The main reason for the fall in inflation is the price rise of food items. The main inflation has not come down. There is a need to monitor excessive liquidity. The macroeconomy will not be immediately affected by the availability of the vaccine. “
Presently the repo rate is four percent. The rate at which the Reserve Bank provides money to banks is called repo rate. ICRA chief economist Aditi Nair said that consumer price index-based inflation (retail inflation, CPI) came down in December 2020, but its stance is ‘tough’. He said, we believe that the central bank will still keep the repo rate as it is. In August 2021 or beyond, the Reserve Bank will change its stance to neutral.
Sunil Kumar Sinha, chief economist and director of India Ratings and Research, Public Finance, also believes that there will be no change in policy rates. Sinha said that growth should be supported through monetary policy. This is the reason why the Reserve Bank’s soft stance will continue. Moneybox Finance co-founder Mayur Modi is also of the opinion that the central bank will continue its soft stance in monetary policy as the economy has not recovered yet.
