RBI To Begin Three-Day Monetary Policy Meet Today To Decide On Key Rates
- ByAyushi Ray | August 4, 2021
RBI to begin three-day monetary policy meet today to decide on key rates. The central bank will announce its bi-monthly monetary policy review on Friday, post the meeting, as per official sources.. The Monetary Policy Committee (MPC) of the RBI is scheduled to announce a bi-monthly policy review on August 6 at the end of the three-day meeting which will be held from August 4 to August 6. According to news agency PTI, the RBI is likely to maintain the status quo on interest rates and “watch the developing macroeconomic situation for some more time” before taking any decisive action(s) on monetary policy. The MPC, consisting of six members led by RBI governor Shaktikanta Das, is in charge of deciding the key policy rates. The panel had left the rates unchanged last time, because of inflation reasons.
It is being anticipated that RBI will adopt a “wait-and-watch” strategy since it has little power to outline monetary policies in a world where higher commodity prices and rising global rates following the Covid-19 recovery are production costs to a huge extent. Inflation was ruled out of the tolerance band during June-November 2020 but has again moved back above the upper tolerance threshold in May and June 2021. The rising inflation in the Indian economy is mostly because of the sky – high fuel prices, that the pressure, however, might ease out in a while after being normalised. It is expected thus that the central bank will keep the repo rate at the present level despite high inflation. The Reserve Bank of India, which mainly factors in the retail inflation while arriving at its monetary policy, has been mandated by the government to keep Consumer Price Index (CPI) based inflation at 4 per cent with a margin of 2 per cent on either side.
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