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Why the RBI is unlikely to hike the repo rate today
RBI Governor Shaktikanta Das In the run-up to the unscheduled monetary policy committee (MPC) meeting today, there has been a debate among a section of economists on whether this meeting is about a rate hike or not. But the debate itself Is unwarranted; it was clear from the day of the announcement that the November 3 meeting would be about framing responses to the government on the central bank’s failure to meet its inflation target for three consecutive quarters (retail inflation, on average, has been above 6 percent). It states that the secretary to the committee shall schedule a separate meeting as part of the normal policy process to discuss and draft the report to be sent to the Central Government under the provisions of Section 45ZN of the Act. Is the RBI’s late action on inflation justified? Sudden and sharp rate hikes can have an adverse effect on an economic recovery too. Third, the RBI will likely give an account of the actions taken so far to tackle inflation, particularly the consecutive rate hikes, including the mid-policy hike in May. The central bank may argue it has done enough to control inflation. Source - Money Control #RBI #Reporate
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