RBI begins three-day deliberations to decide the next monetary policy

• Integrity Education, Delhi
• 10, Feb 2022

The Reserve Bank's rate-setting panel began its three-day deliberations today to decide the next monetary policy in the backdrop of Budget 2022-23, inflationary concerns, and evolving geopolitical situation.

Reserve Bank Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) is scheduled to announce the policy resolution on Thursday.

The meeting was to start on Monday but it was postponed by a day in view of Maharashtra declaring public holiday on February 7 to mourn the death of legendary singer Lata Mangeshkar.

It is widely anticipated that the MPC is likely to maintain the status quo on the benchmark interest rate or repo rate.

Experts, however, are of the opinion that the MPC may change the policy stance from 'accommodative' to 'neutral' and tinker with the reverse-repo rate as part of the liquidity normalization process.

If the RBI maintains status quo in policy rate on Thursday, it would be the tenth consecutive time since the rate remains unchanged. The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting the interest rate to a historic low. 

Sources : News on AIR