Reserve Bank of India (RBI) The three-day meeting of the MPC chaired by Governor Shaktikanta Das will begin on April 3. The monetary policy review will be announced on April 5. Repo rate has not been cut by RBI for a long time. In such a situation, people taking all types of loans including home and car loans are expecting a cut in the repo rate. The reduction in repa rate will reduce their loan EMI. In such a situation, will there be a cut in the repo rate this time?
Ranen Banerjee, principal economic consultant, PwC India, said that some central banks in emerging economies have started cutting policy rates but the central banks of major economies are still in a state of uncertainty. The yield differential between India and the US has narrowed, putting pressure on fund flows. There is a strong possibility that the MPC will keep the policy rate unchanged, he said. But there is also a small possibility of a rate cut. Some members of the MPC may vote for a policy rate cut but they are not in the majority.
Less possibility of change in repo rate
The monetary policy review presented this week is once again unlikely to change the policy rate. The reason for this could be that with the concerns about economic growth gone and it being around eight percent, the Central Bank may now put more emphasis on bringing the inflation to the target of four percent. Experts have said this. Also, the Monetary Policy Committee (MPC) of RBI, which decides on the policy rate, can take into consideration the stance of central banks of some developed countries like America and Britain. These central banks are clearly adopting a ‘watch and wait’ approach regarding policy rate cuts. Switzerland is the first major economy among developed countries to cut the policy rate. At the same time, Japan, the world’s third largest economy, has ended the situation of negative interest rates after eight years.
The first monetary policy review will take place
This will be the first monetary policy review for the financial year 2024-25. The sixth meeting of the MPC will be held in the financial year starting from April 1, 2024. RBI last increased the repo rate to 6.5 percent in February 2023. After that, it has been kept unchanged in six consecutive bi-monthly monetary policy reviews. Bank of Baroda Chief Economist Madan Sabnavis said, “Inflation is still in the range of five percent and there is a possibility of future shock on the food inflation front, in view of this, the MPC will maintain status quo on the policy rate and stance this time too.” Can keep.” He said that there may be a revision in the GDP estimate. Everyone will be eagerly watching this. Sabnavis said, “Economic growth in the financial year 2023-24 has been much better than expected and hence the central bank will have less concerns in this matter and will continue to focus more on bringing inflation in line with the target.”
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