Expected Interest Rate Cut by Reserve Bank of India
- According to a Business Standard survey, the six-member monetary policy committee (MPC) in India is not expected to be perforated with the lowering interest rate tendency in their next review meeting.
- IDFC First Bank alone expects a 25bpts cut in policy repo rate.
- The last 10 reviews of MPC warranted no alteration in the repo rate.
- Most of the respondents expect that growth and inflation estimates for the current financial year will be revised.
- The bank may cut its growth forecast from 7.2% and aerate its inflation outlook from 4.5%.
Repo Rate
- Repo rate is the interest rate charged by the Reserve Bank of India when lending money to commercial banks.
- Any alterations in repo rates can influence the economy directly.
Reverse Repo Rate in India
- Provides interest rate by RBI for borrowing from commercial banks.
- Charged by banks to park excess money with RBI for short-term.
- Crucial monetary policy instrument controlling money supply.
