The Reserve Bank of India (RBI) is set to announce bi-monthly monetary policy later today. On RBI policy outcome, ASSOCHAM Secretary General Deepak Sood believes that the central bank is likely to keep 'accommodative' stance towards lending rates. Also, the ASSOCHAM secretary expects a 'Status Quo' from the latest policy.
Sood said, "Focus of the bi-monthly review of the credit policy by the RBI Monetary Policy Committee, is expected to be ensuring adequate liquidity into the system, retaining the policy stance as ''accommodative''
He said, "As Governor Shaktikanta Das unveils the decision of the RBI-MPC tomorrow, the challenges of striking a balance between the increased and continuous requirement of high liquidity, and taming retail inflation would be shared. In our assessment, the current inflation should be a temporary phenomenon and would ease as supply disruptions resulting from Covid-19 related restrictions are getting resolved.''
On sector-wise performance, Sood said that the RBI has done a commendable job in handling the situation arising out of the pandemic. It has reached out to several sectors like mutual funds, realty, NBFCs and MSMEs, besides the all-encompassing moratorium on loan repayments. At the same time, financial stability and the bank balance sheets have been strengthened.
Further, Sood said that the cut in REPO rate may not be announced, adding he said, the accommodative stance should assure the industry and the market participants about the RBI's commitment to keeping the lending rates benign to give continuous support to growth.
Currently, India's policy repo rate stands at 4%, while the reverse repo rate at 3.35%. Also, the marginal standing facility (MSF) rate and the Bank Rate stays at 4.25%.
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