Categories: Business

RBI monetary policy meets outcome on Thursday

Photo: GOOGLE

RBI monetary policy meet begins

new Delhi. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Tuesday started a three-day discussion on bi-monthly monetary policy amidst a revival of the economy affected by the corona virus epidemic and the industry's growing demand for debt restructuring. A six-member committee headed by the Governor of the Reserve Bank is scheduled to announce the results of the meeting on August 6. This is the 24th meeting of the MPC. The Reserve Bank has been taking proactive steps for some time to limit the impact of the corona virus epidemic on the economy and the lockdown implemented for its prevention. The rapidly changing macroeconomic situation and the deteriorating scenario of growth necessitated the Reserve Bank's rate-fixing committee meeting in March and again in May ahead of time. The total repo rate has been cut by 1.15 percent in the meetings held at the end of March and May 2020. Earlier, the repo rate has been cut by 2.50 percent since February 2019. However, there is no consensus among experts on whether the committee will cut the policy rate in this week's meeting.

Many experts are of the opinion that a one-time restructuring of debt is more necessary in the current situation. A research report by State Bank of India (SBI) said that banks have also reduced interest rates on new loans by 0.72 per cent. Some big banks have given benefits of up to 0.85 percent to customers. This is probably the fastest relief case in Indian history. SBI has lowered the repo-linked loan interest rates by 1.15 percent. It is noteworthy that due to higher prices of meat, fish, food grains and pulses, retail inflation based on Consumer Price Index (CPI) reached 6.09 percent in June. However, the government has been given a target to keep retail inflation within the range of four percent (up or down two percent) by the government. The Reserve Bank mainly looks at the CPI while setting monetary policy. Experts believe that the MPC will maintain a liberal stance on monetary policy in view of the rapidly changing macroeconomic environment.

This post was published on August 5, 2020 2:28 am

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