MUMBAI: The Reserve Bank’s rate-setting Monetary Policy Committee (MPC) will meet next week to decide on the policy stance amid the urgency to revive the coronavirus-hit economy and increased demand for one-time loan restructuring by industry chambers.
Experts are, however, divided over the possibility of another rate cut by the RBI in its forthcoming policy arguing that one-time loan restructuring was more essential at this juncture to tide over the COVID-19 situation.
The MPC, headed by RBI Governor, is scheduled to meet for three days beginning August 4 and announce its decision on August 6.
The central bank has been taking steps proactively to limit the damage to the economy caused by the COVID-19 pandemic and subsequent lockdowns.
It is to be noted here that a fast-changing macroeconomic environment and the deteriorating outlook for growth necessitated “off-cycle meetings” of the MPC first in March and then again in May 2020.
SBI’s research report ‘Ecowrap’ said with the 115 basis points (bps) reduction in repo beginning February, banks have already transmitted 72 bps to the customers on fresh loans in the interregnum which is perhaps a milestone in terms of the fastest policy rate transmission in India. Large banks have transmitted as much as 85 basis points.
This story is from the August 03, 2020 edition of Millennium Post Delhi.
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This story is from the August 03, 2020 edition of Millennium Post Delhi.
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