It is very difficult to cut interest rates for the next 13-14 months.
RBI Repo Rate: Different economists are saying different things regarding the stance of the Reserve Bank of India on the repo rate. In this connection, a senior economist said on Wednesday that the Reserve Bank of India will keep the repo rate stable in the Monetary Policy Committee meeting to be held in February next year, because the inflation rate is much above the fixed target. Neelkanth Mishra, chief economist of private sector Axis Bank and part-time member of the Prime Minister’s Economic Advisory Council, said that the change in the leadership of RBI will not make any difference to the repo rate stance and the institutional capacity is very strong.
It is very difficult to cut interest rates for the next 13-14 months.
Neelkanth Mishra said that in view of the current inflation, it will be very difficult for the RBI to cut interest rates for the next 13-14 months. He predicted the average inflation rate to be 4.5 percent in the financial year 2025-26. Mishra said that except for the third quarter of the next financial year, the core inflation rate is expected to be between 4.5 to 5 percent. In such circumstances, RBI will have very little chance to cut the repo rate.
0.50 percent cut will not have any significant impact
Chief Economist of Axis Bank said that even if RBI cuts the repo rate by 0.50 percent to accelerate the country’s GDP growth, it will not be a ‘decisive’ step to accelerate the country’s growth. He said, “When you take the step of cutting interest rates, it should be decisive. He said that a cut of 0.50 per cent is neither here nor there.
Sanjay Malhotra took over as RBI Governor
Let us tell you that on Wednesday itself, Sanjay Malhotra took charge as the 26th Governor of the Reserve Bank of India. Malhotra will serve as the governor of the central bank for the next three years. However, Sanjay Malhotra is facing many challenges as the country is currently facing inflation as well as a sluggish economy. Earlier on Tuesday, Shaktikanta Das stepped down as RBI Governor. He served 2 consecutive terms as Governor of RBI.
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