RBI Governor Shakti Kantha Das is scheduled to hold the first monetary policy meeting of the current fiscal on April 8. Inflation also continues to rise as crude oil and essential commodity prices rise. So the upcoming monetary policy meeting is seen as an important one.
Everything about growth in the 2022-2023 fiscal year and whether inflation will come under control will be discussed at this monetary policy meeting.
The second wave of the Corona peaked in March last year. So monetary policy decisions were made accordingly. Despite the declining corona this year, the main problems are the continuing rise in crude oil prices and the price of essential commodities due to the Russia-Ukraine war.
The RBI will generally cut interest rates in the face of such rising inflation.
Finally, on May 22, 2020, the RBI cut the repo rate. RBI cut interest rates to 1.15 per cent during the Corona period alone. The repo rate for banks’ large loans from the RBI is 4 per cent. The interest rate on RBI large loans from banks is 3.35 per cent.
RBI is more likely to cut repo rate as retail inflation rises. At the same time the interest rate may go unchanged. The lower the repo rate, the lower the interest rate on bank loan schemes. So lowering the interest rate on bank savings plans will affect savings.
This is because if the repo rate goes up, interest rates on home equity loans will go up. Interest rates on savings plans, including fixed deposits, also go up, resulting in higher profits.