RBI may cut interest rates, monetary policy review will be done on December 5

Dec 02 2019 03:36 PM
RBI may cut interest rates, monetary policy review will be done on December 5

The Reserve Bank of India (RBI) may cut the policy rate repeatedly for the sixth time on 5 December to accelerate economic growth. Bankers and experts have said this. The GDP growth rate has come down to 4.5% in the July-September quarter due to the decline in the manufacturing sector. This is the lowest figure of GDP growth for over 6 years. The Reserve Bank of India has cut policy rates 5 times during 2019 so far.

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The policy rate has been cut by 1.35 % so far: In order to increase the sluggish growth rate and increase the availability of funds in the financial system, the policy rate has been reduced by 1.35% overall. Currently, the repo rate is 5.15%. A banker, on the condition of anonymity, said that the Reserve Bank Governor had said in the past that interest rates would be cut until economic growth picks up, increasing the likelihood that from December 3. The policy rate may be reduced in the starting monetary policy review. IHS Market Chief Economist (Asia Pacific) Rajiv Biswas said the Reserve Bank had decided to liberalize monetary policy with rate cuts in October. There is a possibility of a reduction in the policy rate due to the slowdown on the economic front.

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Economist Rumki Majumdar of Deloitte India said that inflation is still low and given the excess capacity of the economy, it is expected to remain below it. He said that due to this the Reserve Bank can cut policy rates. PwC India leader Public Finance and Economics Ranen Banerjee said the second-quarter GDP figures make it clear that the intervention through monetary policy is not circulating. It will not be sufficient to cut rates once again in the monetary policy review meeting of the Reserve Bank in the coming days.

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