The kind of expectation was being made, the Monetary Policy Committee of the Reserve Bank of India has taken the same decision in the August policy meeting. After cutting interest rates three times in a row, RBI MPC has decided to keep the rate cut freeze this time. By the way, in the upcoming policy meeting, the rate cut hopes have not been blown up and the policy stance has been kept neutral. In fact, the way India has been imposed tariffs on behalf of Trump and threatening to increase the tariff. This clear effect was seen in policy decisions. However, in the current calendar year, the RBI has cut the MPC policy rate by one percent. In the month of June, there was a reduction in interest rates by 0.50 percent. After which it was expected that the RBI would not make any change in interest rates in the August policy meeting. Let us also tell you what kind of decisions RBI MPC has taken in the policy meeting?
RBI did not change repo rate
Announcing the decisions of RBI MPC, RBI Governor Sanjay Malhotra said that no change has been made in the repo rate. This means that the repo rate of RBI will remain at 5.50 percent. By the way, this was estimated in many survey. In the current year, the RBI has cut the repo rate by 1 percent. Earlier, the RBI Governor had cut the repo rate by 0.25 per cent in the month of February. In the month of April too, RBI MPC reduced interest rates by 0.25 percent. In the June policy meeting, the RBI shocked everyone by cutting the interest rates by 0.50 percent. This time very few people were talking about rate cut. Most of the experts believed that RBI MPC would not make any change in interest rates.
RBI changed inflation
On the other hand, RBI has also changed its inflation estimate. During the announcement of MPC, the Governor of RBI said that the country’s inflation is expected to be 3 percent in the current financial year. Whereas in the policy meeting of the month of June, the RBI governor had reduced the estimate of inflation from 4 percent to 3.7 percent. If we talk about the quarter quarter quarter, then if we talk about India’s current inflation rate, then India’s inflation had come to 2.10 percent in the month of June. Which was at 77 -month -old lower level. Even in the month of July, the inflation rate can be between 2.10 percent to 2.50 percent.
This was estimated by experts
Grant Thorrton, partner Vivek Iyer in India said that the global economic scenario is still unstable and the previous rate is still needed to see the impact of the cuttings completely. He said that the RBI has taken into account the previous rate deduction of the aspect of customs uncertainty. In such a situation, we do not think that it should have immediate effect on the policy decision. Praveen Sharma, CEO of REA India (Housing.com) said that this year has already been cut by one percentage points, so the rates are expected to be maintained. Sharma said that home buyers are now inspired by long -term confidence than short -term interest rates. Real estate developers are also demanding houses through flexible payment options and understanding incentives.
These are members of RBI MPC
The MPC includes Governor Malhotra, Deputy Governor Poonam Gupta and Executive Director Rajiv Ranjan as three members of RBI, while external members include Nagesh Kumar, Saurabh Bhattacharya and Ram Singh. The central government has given the RBI the responsibility of maintaining retail inflation in four percent with two percent decrease. Since February this year, retail inflation remains below four percent continuously, but experts believe that RBI will be waiting for more favorable data before changes in rates.