The six-member Monetary Policy Committee (MPC-Monetary Policy Committee), headed by Reserve Bank of India Guv Shaktikant Das, will announce the review of financial policy today. This is the 24th conference of the MPC. Professionals on the RBI’s Monetary Policy Choice Today state that the reserve bank can avoid cutting rates of interest today, however loan restructuring to restore the economy impacted by the Coronavirus crisis Like can reveal other procedures.
Discount rate on EMI loans might go ahead!The government is ready to take all possible steps to offer relief to the common people from this coronavirus (Coronavirus Pandemic). Finance Minister Nirmala Sitharaman has suggested to extend the facility of loan moratorium on EMI. He had actually stated in the FICCI (Federation of Indian Chambers of Commerce and Market (FICCI)) program that talks are happening with the RBI relating to loan moratorium.
The loan moratorium has actually been applicable given that March – In view of the financial effect of the corona infection, the RBI provided the moratorium (deferment in loan payment) facility for three months in March. This center was executed for three months from March to 31 May. Later on, RBI extended it for 3 months and extended it till 31 August. That is, 6 months moratorium facility has actually been offered.
Will there be a cut in rate of interest?
The retail inflation rate has actually been more than six percent and which is outside the scope of RBI. In such a scenario, lots of experts are assuming that the RBI can stop its move in the case of repo rate decrease. The repo rate has been cut by 1.5 percent because February. Banks have actually also decreased interest on brand-new loans by 0.72 percent. For that reason, it appears unlikely that the Reserve Bank will cut policy rates of interest. Nevertheless, some banks and specialists believe that the central bank can cut the repo rate by one-fourth percent this time too.
Food and drink prices have actually increased
In fact, the rise in costs of meat, fish, food grains and pulses has actually led to a boost in retail inflation and this circumstance might avoid the RBI from cutting the repo rate. In June, the retail inflation based on the consumer price index has actually reached 6.09 percent. The federal government has given a target to keep retail inflation within the range of four percent (up or down two percent).
While the expectation of a cut in the repo rate is low, however in the meantime the industry has begun increasing pressure on the demand for increasing liquidity in the market. Now it will be interesting to see what steps the Monetary Policy Committee of RBI takes.