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The Reserve Bank will likely maintain the status quo on the interest rate manager on Wednesday despite high oil prices and the announcement by the government to sharply raise the minimum support price for crops of kharif, estimated the central bank. In its latest monetary policy review in June on inflation concerns, the term loan rate (repo rate) went from 0.25% to 6.25%.
The Monetary Policy Committee led by Urjit Patel will begin its three-day deliberations. Monday in Mumbai to decide the interest rate
The decision of the second bi-monthly review of the monetary policy of 2018-2019 will be made public in the afternoon of 1 August.
Retail inflation, which is factored In 1965, the government entrusted the Reserve Bank with the mandate to maintain inflation at 4% (+/- 2%).
] Crude oil prices have hit its highest level in three years, but continues to be volatile, threatening inflation and the current account deficit.
The largest bank in India, SBI, believes that RBI can not make a new round of rising rates. "We believe that the August rate decision is near, although we thought the status quo rather than a raise seems the best option," the SBI said in a research report
. "Satier the self-fulfilling prophecy" market expectations of a rate hike to stem the depreciation of the rupee (although the rupee has depreciated 3% after June), "he adds. While the rise in the MSP could raise the CPI statistically by 73 basis points, such inflation should not materialize as it is purely subject to the purchase by the central government / the government of the country. 39; State.
increased the minimum support price for kharif crops, including Rs 200 per quintal for paddy, as the government sought to fulfill its promise to give farmers 50 percent more than their cost of production.
Edelweiss Securities: "In t At the next policy review, we expect MPC to maintain its neutral stance while keeping rates unchanged."
DBS World Financial Services Major in a Report research, however, RBI is expected to continue its rate hikes this year. increase of the meeting of August.
According to DBS, the upside risks to inflation and the need to maintain the stability of the financial markets will keep monetary policy on a tightening bias. "We expect increases of 50 basis points in 2018-2019, with the next likely in August," said Radhika Rao, an economist at DBS.
Private Sector Lender HDFC Bank Takes Rate Ruling Decision "Close" for RBI, But Pricing Panel Will Rule Key Policy Rates at Next Review Meeting politics.
"It's a tight call and a difficult balance, but we expect RBI to favor one", "said economists from his home in a note.
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