Reserve Bank May Once Again Cut the Repo Rate

Reserve Bank May Once Again Cut the Repo Rate

- in Business, News
@Staff WeBindas
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New Delhi. In order to promote Economic activities among the fears of impact of global economic growth prospects by global slowdown, the Reserve Bank can cut another 0.25 percent cut in the key policy rate repo on Thursday. Experts have expressed this estimate.

Reserve Bank had cut the repo rate by 0.25 percent in February after the interval of 18 months. After one cut in interest rate, the borrowers can get relief in the current election season.

Following the monetary policy review meeting, on February 7, 2019, the main policy rate repo was reduced to 0.25 percent from 0.25 percent. After assuming the position of Reserve Bank Governor in December 2018, this decision was taken in the first meeting of monetary policy committee chaired by the ruling Das.

This week, a six-member monetary policy committee headed by the Reserve Bank of India governor Das is scheduled to hold a three-day meeting. The committee will announce the decision on April 4 after a meeting in Mumbai. This will be the first bi-monthly monetary policy review meeting of the new fiscal year. Also, if the policy rate is 0.25% cut, then it will be deducted at the second review meeting continuously.

Governor Das has already met with various stakeholders including industry organizations, depositors organization, MSME representatives and bank officials. Inflation has remained within the 4 per cent of the Reserve Bank. With this, the industry is advocating reducing base rates once more.
Head of HDFC Securities (PCG and Capital Market Strategy) VK Sharma said that the market is favorable by reducing the repo rate by 0.25 percent and changing the scenario to normal. Estimated improvement in liquidity and reduction in interest rate would be good for the market.

PFB Shanti Ekambaram, President Kotak Mahindra Bank (Consumer Banking), said that domestic and global factors will be impacted by the policy move in the coming years. Consumption has slowed down and the investment cycle is also slow.

He said that another cut of 0.25 percent in the policy rate later this year is possible, but it will depend on the inflation and economic growth figures. CII Director General Chandrajit Banerjee also said that inflation remains in control, which supports more cuts in interest rates.

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