Reserve Bank is likely to maintain the status quo on interest rates next week

Business
Oct 04 2021 10:11 AM
P C Thomas

Reserve Bank is likely to maintain the status quo on interest rates next week

In the midst of mounting global commodity prices and the need to contain inflation at home, the Reserve Bank of India (RBI) is expected to maintain the status quo on interest rates for the eighth time in a row in its upcoming bi-monthly monetary policy review later in the week, according to experts.

The Central bank Bank had last cut the repo rate by 40 bps in May 2020 to 4 per cent to spur demand in the COVID-hit economy. Since then, the it has refrained from taking any action on interest rates. The RBI Governor-headed six-member Monetary Policy Committee (MPC) is scheduled to meet for three days from October 6. The decision taken at the meeting would be announced by Governor Shaktikanta Das on October 8.

SBI Chairman Dinesh Khara had recently said that it looks like that interest rate should remain as it is. "Growth is only showing green shoots. hence, I think probably, a rate may not really go up, but commentary could talk about inflation. To my mind inflation is essentially on account of the supply chain disruption and once this disruption gets addressed, inflation may not really raise its head, as much as it was seen at the time of the last policy decision," he had said.