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New DelhiOne hour ago
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- Monetary Policy Committee meets after every two months
- Monetary policy will depend on microeconomic situation: RBI
Uncertainties persist due to rising inflation and the Corona epidemic. Meanwhile, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is going to meet. Experts say that RBI can maintain current interest rates in this meeting. This means that there is no hope of relief in interest rates.
The meeting will start from June 2
The monetary policy committee of RBI meets after every 2 months. This three-day meeting will begin on 2 June. RBI Governor Shaktikanta Das will announce the decisions taken in the meeting on 4 June. There was also no change in the key interest rates in the meeting held in April. Presently RBI’s repo rate is 4% and reverse repo rate is 3.35%. In the annual report released last week, the RBI made it clear that the monetary policy of 2021-22 will depend on microeconomic conditions.
Economic outlook uncertain due to Corona: Aditi Nair
Ranen Banerjee of Economic Advisory Services PwC India Leader says that we are using open market operations as a tool for long breaks. This will help keep the 10-year-old yield consistently around 6%. Aditi Nair, chief economist of ICRA also has a similar view. Aditi says the economic outlook remains uncertain due to the Corona epidemic. We expect the stance of monetary policy to remain consistent in the larger part of 2021 until vaccine coverage improves.
Consumer price index may come at 5.2%
Aditi Nair says, “We estimate that the average consumer price index (CPI) inflation may come down from 6.2% in 2020-21 to 5.2% in 2021-22.” Nair says that anytime the CPI inflation MPC The target range could be more than the mid-point of 2-6. However, he ruled out the possibility of further cuts in interest rates to support economic activity and sentiment. The central government kept inflation for the next five years i.e. from 2021 to 2026. The rate has been fixed at 4%, with a lower band of 2% and an upper band of 6%.
Economy is not fully open yet: Padmaja
Indian Bank MD and CEO Padmaja Chundru says that the MPC will closely monitor inflation. The economy is not fully open yet. The uncertainty regarding vaccination still continues. I believe that the RBI will keep the interest rates at the current level. The President of NARADCO Niranjan Hiranandani also says that the RBI will retain its accommodation stance. Hiranandani says the economy has been affected by the Kovid-19. There is a need to increase liquidity in the system. Liquidity is required, especially for stressed industries.