The Monetary Policy Committee will meet on Friday (Dec. 4) under the chairmanship of RBI Governor Shaktikant Das. Coronavirus and lockdown at the meeting, the RBI is likely to make a big announcement in view of rising inflation. The Monetary Policy Committee meets every 2 months to discuss ways to improve the economy.
Interest rates are also decided. At the meeting, experts predicted that interest rates would remain at current levels. At the April meeting, the repo rate was 4 per cent, while the reverse repo rate was 3.35 per cent. The Coronavirus caused lockdowns in most parts of the country. This has had a detrimental effect on the economy.
Petrol has crossed hundreds in the country. This high rate is likely to push up inflation. Therefore, it will not be easy for the MPC to decide to reduce interest rates, said Ranan Banerjee, leader of PWC India. Aditi Nair, chief economist at ICRE, said there was no clear position on financial transactions during the Coronavirus period.
Unless there is a major change in the vaccination process, this year’s monetary policy will have to be kept liberal. Money Box Finance Controller Viral Shrestha said the policy is expected to remain the same wherever interest rates are concerned, given the risk of inflation.
The rural economy needs to continue to have adequate credit. Providing some facilities for rural centric and small NBFCs will be a big help.