InvestorQ : Is the RBI expected to cut the repo rates in the Feb policy?
sara Kunju made post

Is the RBI expected to cut the repo rates in the Feb policy?

Answer
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Roshni Hegde answered.
7 months ago


The sixth bi-monthly monetary policy statement for 2019-20 was disclosed by the Reserve Bank of India (RBI) today on 06th Feb 2020. The repo rate was not changed at 5.5%. To meet the goal of growth revival and control inflation within the target the rate was kept unchanged. Indian equity markets zoomed after the RBI announcement.


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7 months ago


Most likely, the RBI will not cut the rates in the Feb policy. An important consideration for the RBI policy decision is the rate of inflation. However, this rate of inflation has gone up to 7.35% in December and hence any rate cuts are ruled out for now, although we may still have to wait for the final announcement on Feb 06 by the RBI. Also, the government is looking to focus more on fiscal policy and less on monetary policy and that is also reducing the chances of rate cut. Indian real rates are already in negative territory and hence rate cuts may be difficult in February.