Reserve Bank’s Monetary Review Meeting: There is a possibility of another hike of 0.50 per cent in the repo rate to check high inflation. This fear is because the three-day meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will start from today.
The RBI can also increase the repo rate in line with the increase in interest rates by other major central banks including the US central bank Fed Reserve. Based on the recommendations of the MPC, the RBI had increased the repo rate by 0.50 percent in June and August. Earlier in May, the central bank had increased the interest rate by 0.40 percent in its sudden meeting.
New rates will be released on 30 September
The meeting of the MPC, chaired by Reserve Bank Governor Shaktikanta Das, will run from today till September 30. The decision on the rates will be announced on Friday i.e. 30 September. According to experts, the central bank may once again increase the key policy rate repo by 0.50 percent to a three-year high of 5.9 percent. It is currently 5.4 percent. RBI has increased the repo rate by 1.40 percent since May. Bank of Baroda has said in a report that monetary policy will be monitored more closely this time in view of the recent developments in the foreign exchange market after the Federal Reserve hiked rates last week.
There may be an increase of 0.50 percent
It has been estimated in the report that the RBI may once again increase the repo rate by 0.50 percent in the upcoming MPC meeting. Significantly, the government has given a target to RBI to keep retail inflation at 4 percent with a variation of two percent.
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