National News
RBI may again pause repo rate at this week’s policy meet
The RBI’s monetary policy committee is expected to keep key interest rates unchanged in its meeting this week as inflation is seen to be under control.
Repo rate : The RBI’s monetary policy committee is expected to keep key interest rates unchanged in its meeting this week as inflation is seen to be under control. However, fixed income markets, which include bonds, are likely to see softer interest rates as liquidity improves due to deposits of Rs 2,000 notes, increased government spending and the RBI’s foreign exchange interventions.
The six-member monetary policy committee (MPC) will meet between June 6-8. RBI governor Shaktikanta Das will announce its decision on the last day of the meet.
In its last meeting in April, the MPC had decided to ‘pause’ for the first time after it began its rate hike cycle, aiming to reduce inflation, in May 2022. Soon after the April meet, retail inflation fell to an 18-month low of 4.7%. The RBI’s mandate is to keep retail inflation in the range of 2-6%. “The RBI will most likely maintain its pause next week,” said Ashish Vaidya, head of treasury at DBS Bank. The US Federal Reserve is also widely expected to pause its rate hike.
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