RBI May Refrain From Interest Rate Cuts As Inflation, Oil Rise
It is speculated that RBI is about to hold back the key rates of interest for the third time in a row. The attributes that have contributed to the decision are hiking oil prices, government’s scheme to accentuate the price of crop support, firming inflation, and more.
The Monetary Policy Committee or MPC has 6 members. This committee is led by the Governor of the Reserve Bank of India or RBI, Urjit Patel. They will be meeting on the February 6, 2018, and February 7, 2018, for the 6th bi-monthly Monetary Policy Statement for the fiscal year 2017–2018. The final resolution will be taken during that meeting.
The resolution decided by the committee will be declared to the common people on Wednesday by the Central Bank. In the resolution of December review, the benchmark rate of interest has not been hiked by the RBI due to the possibility of accelerating inflation while depleting growth that is forecasted to reach 6.7% for the present financial year.
The Central bank has depreciated the benchmark lending rate in August, by 0.25% points which has made it 6%. This number is the lowest rate in the last 6 years. Experts and bankers have anticipated that the RBI might halt the rate of short-term lending or repo-rate due to the inflation inclining towards a steep hike and the price of the crude oil taking a firmer shape.
The economic activities in the second half of the financial year have stabilized that has automatically depleted the pressure on the Reserve Bank of India to opt for cutting the rate to promote growth.
Rajkiran Rai G. the CEO and Managing Director of Union Bank of India stated that the rate of interest should be held by RBI. Even if the depletion in the rates is not possible at this time but increasing the same should be refrained. As per him, the position of the policy will be a neutral one.