RBI Can Make Big Announcements On February 10

RBI can make big announcements on February 10, know what will be the effect on your pocket.

The monetary policy review meeting of the Reserve Bank of India (RBI) will end on Thursday. But before that, all eyes are on the outcome after the meeting.

That is, what big decisions can be taken in the meeting, which will affect the pocket of the common man. For example, any change in the Repo or Reverse Repo rate will make the loan cheaper or costlier.

If experts are to be believed, RBI will increase the reverse repo rate. However, this is not expected to affect the interest rate of the loan.

Because the reverse repo rate is not directly linked to the pocket of the common man.

According to Lakshmi Iyer, CIO of Kotak Mahindra Asset Management Company, after the budget, all eyes are now on the MPC meeting.

Given the huge borrowings for FY23, RBI is expected to announce OT (Operation Twist) which can act as an anchor for long-term bond yields.

We expect the reverse repo rate to be hiked and other rates unchanged. We do not expect any major change in GDP or inflation forecasts.

RBI’s eyes will be on inflation.

According to Vivek Rathi, Director-Research, Knight Frank India, the Indian economy has weathered the Kovid storm well and remains the fastest-growing economy.

However, the third wave and the Omicron explosion in the country highlight the effects of the long-running pandemic, which the economy may have to face going forward.

We believe that the central bank will keep a close watch on consumer inflation levels, which have risen but are within tolerance limits.

Tighter measures are expected for quick liquidity in view of higher inflation apprehensions due to the rise in crude oil and commodity prices.

However, we expect key policy rates to remain in place for some time before the economy finally emerges out of the third wave of the pandemic.

Increasing spending on infra will help.

According to Shriram City MD YS Chakraborty, we expect the status quo on repo rates with a reverse repo rate hike of 25bps in monetary policy to be announced on February 10, 2022.

RBI needs to focus on rising inflation and liquidity. On the demand front, the data on January 14, 2022, showed a renewed demand for loans.

It is showing credit growth of 8% but still lagging behind the level of 14% credit growth in FY19.

Interestingly, we saw record loans to MSMEs. Budget 2022 infra spending will further support the economy in FY23.