The Bank of India (RBI) reserve (RBI) is not possible to raise the repo level in a two-month monetary policy review, show a survey by the Times of India Online.
The TOI-Online survey of the RBI and Macroeconomic Outlook policies found that the monetary policy committee (MPC) will accommodate the repo level for the remainder of the financial year, even because there are opportunities for the reverse repo level hiking in the coming months.
MPC is scheduled to announce a monthly monetary policy on October 8.
Of the 11 economists and participating experts, 7 is the view that the RBI will not raise the repo level on TA-repo.
While three of them said it was difficult to predict the actions of the central bank, only one economist said that the repo level would be raised in a half-year financial year.
Repo Rate is a level where the RBI lends short-term money to the bank.
On the other hand, reverse the repo rate is where the bank lends money to the RBI for the short term.
Together with two tariffs forming interest rate corridors under the Central Bank Liquidity Adjustment Facility (LAF) and used as the main policy instrument to maintain inflation in the targeted range.
While the main objective of monetary policy is to ensure price stability, you have to do it while remembering the need for sustainable GDP growth.
The Indian economy saw the worst contraction -24.4% in April-June 2020.
The economy of India affected by Covid saw the MPC cutting repo level of 40 basis points to 4% on May 2020 to support growth.
The reverse repo level is also cut by 40 bps.
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