With the Reserve Bank of India (RBI) announcing its second bi-monthly monetary policy review today, the economists have said that there would be no change to interest rates, adding that the apex body would adopt a wait and watch policy to see how inflation trajectory develops. “After the last figure for inflation, there was a lot of expectations within the market that the RBI might really cut rates in the current policy. We actually don’t believe that.We think the RBI will wait and watch how the inflation trajectory develops,” Rishi Shah, Economist, Deloitte India, told ANI.
“Market is expecting the Monetary Policy to be neutral, but there is not going to be any change. It is going to be status quo; we are not expecting change in reverse repo, repo rate or the CRR,” another economist K.K. Mittal told ANI.
Experts, however, believe that said if the GDP growth remains stable around 7 percent and inflation remains in the RBI’s comfort zone of around 4 to 5 percent, then a possible cut to lending rates may take place at the end of the year. “How RBI is going to diagnose the inflations and the inflationary expectations and the GDP growth rate, is going to be watched very carefully,” Mittal added. However, Union Finance Minister Arun Jaitley on Monday hoped for cut in the interest rate citing good monsoon and no surge in oil prices.