RBI likely to maintain status quo on interest rate

Amid fears of a third wave of Covid pandemic and hardening of retail inflation, the Reserve Bank is likely to maintain status quo on interest rate and watch the developing macroeconomic situation for some additional time before taking any definitive action on monetary policy.

The RBI is scheduled to declare it’s every other monthly monetary policy review on August 6 toward the end of the three-day meeting August 4-6 of the Monetary Policy Committee (MPC).

The RBI Governor-headed six-part MPC decides on the key policy rates. The board had left the rates unaltered last time citing concerns on inflation.

“Higher commodity rates and rising worldwide prices post the robust recuperation in a couple of industrial nations will have implication on production costs. We anticipate that the RBI should be in a pause and-watch mode as it has limited elbow room to manoeuvre monetary policies,” opined Rumki Majumdar, Economist, Deloitte India.