Friday, February 23rd, 2024

Review meeting of RBI’s Monetary Policy Committee begins, will there be an increase in interest rates? Know what is the possibility

Photo:FILE There remains concern regarding various aspects related to food inflation.

The discussion about interest rates has started once again. Actually, the meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India has started on Wednesday. Regarding this meeting which will last for three days, it is believed that this time also MPC will not make any change in the policy rate repo rate. According to Bhasha news, a major reason for this is the GDP (gross domestic product) growth rate being higher than expected in the second quarter of the current financial year and also the trend of softening in inflation. RBI did not make any change in the repo rate in the last four monetary policy reviews. The central bank last increased the repo rate to 6.5 percent in February.

Announcement of decision for review on December 8

According to the news, RBI Governor Shaktikanta Das will announce the decision of the six-member MPC on December 8. Regarding expectations from the MPC, ICRA’s chief economist Aditi Nair said that the GDP figure in the second quarter of the financial year 2023-24 has been higher than the previous estimate of the Monetary Policy Committee. However, concerns remain regarding various aspects related to food inflation. Considering all this, we estimate that the MPC may keep the policy rate unchanged in the monetary policy review of December 2023. However, the monetary policy stance may be aggressive.

MPC may increase GDP estimate

According to Deutsche Bank Research, the RBI may raise the GDP forecast for 2023-24 to 6.8 per cent from 6.5 per cent while the consumer price index based inflation forecast is likely to be kept unchanged at 5.4 per cent. He said that it is expected that RBI will not make any change in the repo rate. RBI may maintain tight cash position. RBI will ensure that short-term rates remain around 6.85-6.90 percent.

Stable interest rates will attract home buyers

The government has given the responsibility to RBI to keep retail inflation at four percent with a variation of two percent. Kushagra Ansal, director, Ansal Housing, said that in its previous announcements, RBI has maintained the repo rates at the previous level, which indicates a positive trend for real estate companies and buyers. We are expecting the central bank to keep the repo rate intact even after this meeting. Stable interest rates will attract home buyers towards real estate.

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