New Delhi: Will taking a loan to become expensive once again? This apprehension is being expressed before the meeting of the Monetary Policy Committee (MPC) starting on Monday (April 3). Experts estimate that the Reserve Bank of India (RBI) can increase the interest rates by 25 basis points i.e. 0.25 percent.
With retail inflation remaining above a satisfactory level of 6 percent and an aggressive stance by several central banks including the US Federal Reserve, the RBI may also decide to hike the repo rate by another 0.25 percent. This will probably be the last hike in the interest rate hike cycle that began in May 2022. Let us tell you that the bi-monthly review meeting of the MPC of RBI is going to start from 3rd April. This meeting, which will last for 3 days, will end on April 6 with the decision regarding the policy rate.
The repo rate also increased by 0.25 percent in February
To control inflation, RBI has adopted the stance of increasing the policy interest rate continuously from May 2022. During this, the repo rate has increased from 4 percent to 6.50 percent. The repo rate was also increased by 0.25 percent in the last MPC meeting held in February.
The inflation rate was 6.52 percent in January and 6.44 percent in February
Inflation based on Consumer Price Index (CPI) stood at 6.52 percent in January and 6.44 percent in February. This level of retail inflation is more than the satisfactory level of 6 percent of RBI.
Axis Bank Chief Economist Saugata Bhattacharya recently said, “I expect another final rate hike of 0.25 percent.”
Bank of Baroda’s Chief Economist Madan Sabnavis said, “With inflation remaining above 6 percent for the last two months and liquidity now almost neutral, it is expected that the RBI will once again cut the repo rate by 0.25 percent.” this can increase. Simultaneously, by declaring its stance neutral, RBI can also indicate that the rate hike phase is over.
MPC will have 6 meetings in the current financial year
Overall, in the entire current financial year 2023-24, RBI will organize a total of 6 MPC meetings. The central government has tasked the RBI to ensure that retail inflation remains within the range of 4 percent (up or down 2 percent).
