Referring to the RBI’s ‘State of the Economy’ monthly bulletin for November this year, Shriram Finance Executive Vice President Umesh Revankar said this has raised hopes of a return to the low rate regime.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) can maintain the repo rate at 6.5 percent. Let us tell you that it will not change its stand in the meeting to be held next month. RBI Monetary Policy Committee meeting will be held from 6th to 8th December next month. No change in repo rate is expected in this policy. This means that there is no hope of getting relief from the increased EMI of all types of loans including home and car loans. Let us tell you that inflation will be 5.5 percent on average for the entire year. The inflation rate has declined to 4.7 percent in October, but still the central bank will not revise the repo rate. He is cautious about inflation.
So no change is expected
Bank of Baroda Chief Economist Madan Sabnavis told IANS that we expect status quo on both repo rate and stance in the upcoming policy. Food inflation in particular remains a matter of concern. The prices of both grains and vegetables are increasing. Inflation for the entire year will average 5.5 percent. Therefore there is no scope for change in the repo rate. According to him, the matter of relief is that core inflation will remain low.
RBI has taken this step
Referring to the RBI’s ‘State of the Economy’ monthly bulletin for November this year, Shriram Finance Executive Vice President Umesh Revankar said this has raised hopes of a return to the low rate regime. But the risk weight on consumer loans, credit card receivables and NBFC exposures has been increased by 25 percentage points to 125 per cent by the RBI to rein in liquidity in the system, Revankar said. RBI wants to continue its monitoring of inflation. The MPC will keep the repo rate at 6.5 percent as it aims to stabilize inflation around the 4 percent medium-term target by controlling liquidity in the system, he said. “We expect there will be no rate cut till the beginning of the next financial year,” Revankar said.
