NEW DELHI: The Reserve Bank of India (RBI) is likely to maintain a status quo on benchmark interest rate in its next monetary policy meet outcome to be announced on February 5, four days after the presentation of the Union Budget 2021-22.
Analysts are of the view that the RBI will refrain from trifling with the interest rates and keep the monetary stance accommodative at the policy review though it will take guidance from the budget to be unveiled by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1.
"We expect the Monetary Policy Committee (MPC) to continue the pause. The fall in the inflation rate was mainly due to falling in food prices. The core inflation rate has not come down. Excess liquidity needs to be watched.
the six-member Policy Committee headed by RBI Governor is scheduled to meet for three days starting February 3. The resolution meeting would be announced on February 5. The current repo rate or rate at which the RBI lends to banks is 4 percent.
The RBI had last revised its policy rate on May 22, in an off-policy cycle to perk up demand by reducing the interest rate to a historic low. The RBI has cut policy rates by 115 bps since February last.
The Central Bank has been asked by the government to keep the retail inflation at 4 percent, either plus, minus 2 percent.
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