RBI monetary policy: In the upcoming monetary policy review meeting of RBI, the general public can get relief on the interest rates front.
The Reserve Bank of India (RBI) can maintain the status quo on the interest rates front in its upcoming monetary policy review meeting. However, the central bank’s stance may also change in view of retail inflation crossing the upper-satisfactory level, uncertainties arising out of the Russo-Ukraine war and the need to protect and stimulate growth. Experts have expressed this opinion.
Monetary review meeting to be
held from 6 to 8 April The first monetary review meeting of the Monetary Policy Committee (MPC) headed by Reserve Bank Governor Shaktikanta Das for the current financial year 2022-23 will be held from 6 to 8 April. The results of this meeting will be announced on April 8.
Aditi Nair, chief economist of rating agency Icra Ltd, said the MPC is expected to revise its consumer price index-based inflation forecast in the April 2022 policy review. Apart from this, the growth rate projections for 2022-23 can be reduced.
Hoping to maintain status quo
he said, “MPC will not ‘sacrifice’ growth to control inflation. With the medium-term inflation target at a high of 6 per cent, the MPC’s stance will be more supportive of growth for a longer period of time than other central banks. Overall, the status quo on the policy front is expected to be maintained in April 2022.
Suman Choudhary, chief analysis officer, Acute Ratings and Research, said given the current uncertainties, the Reserve Bank has limited scope to tighten monetary policy. He said that amid the damaging effects of the war, the central bank has to take steps to keep inflation at a satisfactory level and at the same time provide support to growth.
Choudhary said that going forward, the Reserve Bank may increase the reverse repo rate by 0.4 per cent in the monetary review of June-August, 2022 and by half a per cent overall in the remaining period of 2022-23.
On the other hand, Dhruv Aggarwal, Group CEO of Housing.com, Makaan.com and PropTiger.com, said it is difficult for
the Reserve Bank to maintain status quo in view of the increase in inflationary pressures due to Ukraine war. It will be difficult to keep He said, “While this will affect the process of revival in India after the disruptions caused by various waves of the coronavirus pandemic, there is no scope for the Reserve Bank to avoid a hike in interest rates.”
Japan’s brokerage company Nomura said in a report that the Reserve Bank will probably re-assess its GDP and consumer price index based inflation forecast in the upcoming monetary review meeting.
The repo rate remained unchanged for the 10th time in a row at 4 per cent in February,
before the Reserve Bank of India announced its new credit policy on February 10, 2022. The Central Bank did not make any changes in the interest rates. RBI retained the repo rate at 4%. At the same time, the reverse repo rate also remained at 3.35%.
