Curated By: Business Desk
Last Updated: August 07, 2023, 12:07 IST
The policy verdict will be unveiled by Governor Shaktikanta Das on August 10.
The next meeting of RBI MPC is starting from 8th August in which it will be decided whether the interest rates will increase or remain stable.
Amid mounting worries over inflation, the Reserve Bank of India (RBI) appears poised to maintain the current interest rate in its upcoming monetary policy review. Experts opine that, in a bid to sustain the ongoing momentum of economic growth, the RBI will opt to keep borrowing costs stable. The Monetary Policy Committee (MPC), composed of six members and headed by the RBI governor, is scheduled to convene from August 8 to 10. The policy verdict will be unveiled by Governor Shaktikanta Das on August 10.
Though the RBI embarked on a process to elevate interest rates in May last year, the repo rate has steadfastly stood at 6.5 per cent since February. This has translated into no alterations in the prime lending rate over the course of the past two bi-monthly policy assessments conducted in April and June.
Swaroop Kumar Saha, the Managing Director of Punjab & Sind Bank, underscored that the RBI’s considerations encompass a range of factors, including global trends. Thus, the recent moves towards higher interest rates by various central banks, exemplified by the US Federal Reserve, will inevitably influence the RBI’s stance. Saha noted, “Given the broader circumstances, I anticipate the RBI maintaining the repo rate at its existing level. In the event of a stable global landscape, it’s plausible that the interest rate will hold steady over the next 2-3 quarters.”
Tribhuvan Adhikari, Managing Director of LIC Housing Finance, echoed sentiments that the central bank is likely to persist with the current interest rate stance during the imminent monetary policy review. He emphasized that the interest rate is projected to remain unaltered in the immediate horizon.
Indranil Pan, Chief Economist of YES Bank, emphasized that despite inflation pressures, there is little room for rate adjustments. He particularly pointed out that the inflationary trends in essential commodities like tomatoes have not triggered expectations of imminent rate changes.
The Indian government has tasked the central bank with maintaining retail inflation at 4 per cent, with an allowable margin of deviation spanning up to 2 per cent in either direction. In June, the country’s retail inflation gauged through the Consumer Price Index, reached a three-month high of 4.81 per cent. Nonetheless, this figure stays beneath the RBI’s tolerance level of 6 per cent.
