Live
- Drug abuse eating into vitals of our nation
- Sai Durgha Tej gets special gift
- They always want me to win, and now I feel lucky to have been offered a story like ‘Zebra’: Satyadev Kancharana
- ‘Democracy first, humanity first’: PM Modi in Guyana's parliament on two countries' similarities
- PKL Season 11: Telugu Titans register third straight win to top standings
- Is Pollution Contributing to Your COPD?
- NASA Unveils Underwater Robots for Exploring Jupiter's Moons
- Additional Central forces arrive in violence-hit Manipur
- AR Rahman and Saira Banu’s Divorce: Legal Insights into Common Issues in Bollywood Marriages
- 82.7 pc work completed in HPCL Rajasthan Refinery area: official
RBI’s rate-setting panel meets, decision tomorrow
The RBIs Monetary Policy Committee MPC on Tuesday began 3day meet to decide on key rates amid expectations it would change stance to neutral on low inflation but may not cut rates due to fiscal challenges and rising oil prices
New Delhi: The RBI's Monetary Policy Committee (MPC) on Tuesday began 3-day meet to decide on key rates amid expectations it would change stance to neutral on low inflation but may not cut rates due to fiscal challenges and rising oil prices.
The six-member MPC, headed by RBI Governor Shaktikanta Das, will meet between Tuesday and Thursday for the sixth bi-monthly monetary policy statement for 2018-19. Deviating from the practice of releasing the resolution of MPC in afternoon, the Reserve Bank of India (RBI) will place it on its website at 11.45 am on February 7. The RBI maintained status quo on the key lending rate (repo) in its last three bi-monthly policy reviews after raising the rate twice by 25 basis points each in the fiscal. Currently, the repo rate stands at 6.50 per cent.
According to experts, the MPC is likely to change its policy stance to 'neutral' from the current 'calibrated tightening' in its meeting this week on low inflation footprint but would refrain from cutting interest rates due to fiscal challenges and rising crude oil prices. In its previous monetary policy review in December 2018, the RBI had kept interest rates unchanged but held out a promise to cut them if the upside risks to the inflation do not materialise. Having raised rates twice this fiscal, the central bank retained its 'calibrated tightening' policy stance.
The government has mandated the RBI to contain retail (Consumer Price Index-based) inflation at 4 per cent (+, - 2 per cent). Continued decline in food prices pulled down retail inflation to an 18-month low of 2.19 per cent in December 2018. The country's largest lender SBI in its research report 'Ecowrap' has said the RBI might cut key lending rate by 0.25 per cent in view of benign inflation.
"We now expect RBI to change its stance in February, but it is likely to remain on a pause mode. The first cut might happen in April 2019, but we believe it will be shallow rate cut cycle. However, we will not be overtly surprised if the RBI delivers a 25-bps rate cut on February 7 itself," the report said.
