PNB Scam: RBI Discontinues Letter of Understandings And Letters of Comfort
Mumbai, Dec 6: The Reserve Bank of India will announce its monetary policy on Wednesday. The apex bank is expected to keep key rates unchanged as the GDP growth improved and inflation also recorded a seven-month high.
The monetary policy committee held discussions for two days. It is expected that the policy rates will be kept at 6 per cent, which is the lowest since November 2010. In August, the bank had cut repo rate by 25 basis points. In October, it kept the rates unchanged.
The RBI is likely to show its concerns over rising inflation, which was 3.58 per cent in October. The inflation of food and energy prices remained 4.5 per cent, which may prompt the bank to not change key policy rates.
The GDP growth rate showed an improvement in the second quarter of the financial year 2017-18. It was 6.3 per cent, a marginal increase from last quarters 5.7 per cent. The improved growth may be another reason that RBI may keep rates unchanged.
In a Bloomberg survey, most of the economists said that the repurchase rate will stay at 6 per cent, whereas only a few economists predicted a rate cut of .25 per cent.
“It’s going to be a status quo. The liquidity in the system is very low, deposit rates are firming up and there are concerns about inflation,” Union Bank MD and CEO Rajkiran Rai G told PTI.