Business Desk, AnyTV, New Delhi
Published by: Deepak Chaturvedi
Updated Mon, 06 Jun 2022 04:19 PM IST
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Expansion
The three-day meeting of RBI’s Monetary Policy Committee began in Mumbai from Monday. All eyes are on this meeting being held amidst speculations of a hike in policy interest rates. There are speculations that a decision may be taken to increase the repo rates by 35 to 40 basis points.
The meeting is being chaired by RBI Governor Shaktikanta Das and he will announce the decision of the Monetary Policy Committee after deliberations on Wednesday. It is worth noting that Das has already indicated that there may be another hike in the repo rate, although the decision of how many basis points he can increase it will be known only in the outcome of the meeting. But, there is speculation that the central bank may go for a hike of at least 35 basis points (bps) to 40 basis points.
It is worth noting that in order to control inflation last month, RBI had hurriedly called an MPC meeting without prior notice and increased the repo rates by 40 bps. Let us inform here that in view of the data of retail inflation in the country, a big increase in policy interest rates is being estimated. Retail inflation in the country has risen for the seventh consecutive month to touch the high level of the last eight years and its figure reached 7.79 percent in April.
It was told by the government that inflation is rising mainly due to increase in the prices of commodities including fuel. The prolonged Russo-Ukraine war has further pushed up commodity prices around the world. Whereas wholesale price-based inflation has remained in double digits for 13 months and touched a record high of 15.08 per cent in April. In such a situation, to control this inflation, the Reserve Bank can take more decisions related to changes in interest rates.