Experts believe that the Reserve Bank will avoid changes in interest rates. However, he will maintain his soft stance. Finance Minister Nirmala Sitharaman will present the general budget in the Lok Sabha on February 1. In such a situation, the monetary policy committee of the Reserve Bank will also take direction from the budget proposals.
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“We anticipate that the MPC will maintain the status quo on the interest rates front,” said M Govinda Rao, Chief Economic Advisor, Brickwork Ratings. The main reason for the fall in inflation is the price rise of food items. The main inflation has not come down. There is a need to monitor excessive liquidity. The economy will not be immediately affected by the availability of the vaccine. ”Repo rate is currently 4 percent
The three-day meeting of the Monetary Policy Committee headed by Reserve Bank Governor Shaktikanta Das will begin from February 3. The results of the meeting will be announced on February 5. Presently the repo rate is 4 percent. The rate at which the Reserve Bank provides funds to banks is called repo rate.
Economists opinion, RBI will keep repo rate unchanged
ICRA chief economist Aditi Nair said that in December 2020, inflation based on consumer price index has come down, but its stance is tough. He said, we believe that the central bank will still keep the repo rate unchanged. In August 2021 or beyond, the Reserve Bank will change its stance to neutral.
Sunil Kumar Sinha, chief economist and director of India Ratings and Research, also believes that there will be no change in policy rates. He said that growth should be supported through monetary policy. This is the reason why the Reserve Bank’s soft stance will continue.
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Ramesh Nair, former Chief Executive Officer (CEO) of JLL India, said that the real estate sector has been the worst hit due to the epidemic and various types of restrictions. He said that the Reserve Bank should cut policy rates, which will make home loans cheaper. This will give a boost to the real estate sector.