RBI to announce bi-monthly monetary policy for current fiscal today

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Reserve Bank of India (RBI) will announce its fourth bi-monthly policy for the current fiscal today. There is widespread expectation that RBI’s Monetary Policy Committee (MPC) headed by Governor Shaktikanta Das will slash benchmark interest rate to give a fillip to the economy. The RBI Governor has already hinted that the benign inflation provides room for further monetary policy easing.

AIR correspondent reports that experts and industry feel low inflation provides enough headroom for the RBI to further lower the policy rate, especially when festive season has just started. Besides experts feel that the further reduction of repo rate will not only bring down the lending rates but also incentivise investment and boost consumption. The government’s fiscal space has been squeezed on account of cut in rates of corporate tax as well as lowering of GST rate on various goods. Revenue collection too has been below the Budget estimates. Economists are of the opinion that the onus of taking initiatives now rests with the central bank. With liquidity concerns in the NBFC sector almost taken care of, the real estate sector too is hopeful that the RBI will go in for the much-needed rate cut to boost demand for affordable housing.