RBI: Reserve Bank’s Monetary Policy Committee meeting begins today, less likely to change interest rates

RBI Monetary Policy Committee: The meeting of the Monetary Policy Committee (MPC) of the Reserve Bank has started from today and on Wednesday (December 8) the RBI will release the results of the monetary policy review. Many economic decisions, including changes in policy rates, will be reviewed in the MPC meeting headed by Reserve Bank Governor Shaktikanta Das. All eyes are on the credit policy coming on December 8 and it is expected that there will be no change in interest rates.

Fears over Omicron’s rising case
As far as reducing the rates is concerned, due to the increasing case of new variant of Corona in the country Omicron, the apprehensions have also increased and it is believed that keeping this in mind RBI will not make any changes in the rates. However, according to an economic newspaper poll, the 6-member MPC of the Reserve Bank can change the reverse repo rate.

When was the last policy rate changed?
The Reserve Bank of India last changed the policy rates on 22 May 2020 and since then there have been eight monetary policy reviews and RBI has not changed the interest rates. In the last MPC meeting of this year, steps will have to be taken to overcome many challenges before the RBI. While the need to maintain liquidity in the economy will have to be taken care of, decisions will have to be taken keeping the fluctuations in inflation rates in the center.

what happened in the last meeting
The last meeting of the RBI’s MPC was held on 6-8 October and while there was no change in interest rates, the Monetary Policy Committee had retained the GDP growth rate forecast for the fiscal year 2021 at 9.5 per cent.

What are Repo Rate and Reverse Repo Rate at present
At present, the repo rate is at 4 percent and the reverse repo rate remains at 3.35 percent. The rate at which RBI gives loans to commercial banks and other banks is called repo rate. Lower repo rate means that all types of loans from the bank will become cheaper. This also increases the interest rate on your deposit. The rate at which banks get interest on the money deposited in RBI on their behalf is called reverse repo rate. The extra cash that banks have is deposited with the Reserve Bank. Banks also get interest on this.

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