INSUBCONTINENT EXCLUSIVE:
the growth is revived, the RBI will continue to remain in an accommodative mode and therefore a conclusion on what is the minimum repo rate
where the central bank will take a pause cannot be concluded at this stage and will again depend on the next deliberations of the MPC.The
queries that if the RBI may reach near about 5 and 4.75 per cent, which is historically low, there is no space to go beyond that
So, by this statement, the MPC is giving this indication that for policy rate, there is no lower bound as such, as per the edited minutes of
the MPC media meeting on October 4 ."No, how much policy rate is around the lower bound - we have not said anything about it
What we want to say that we are giving some kind of forward guidance that as long as growth momentum remains as it is and till the growth is
what is the minimum repo rate where the RBI will take a pause
It is not possible to comment on that at this particular point of time
All that it says is to give clear indication that RBI will continue with the accommodative stance as long as it is necessary to revive the
growth momentum," Mr Das said.On if the MPC are seeing the historical low as a lower bound, Mr Das said: "It will not be possible for me to
say anything about the lower bound
That will again depend on deliberations of the MPC
When the next deliberation of MPC will happen, then the decision will be taken."The issue of lower bound of repo rate has arisen because the
repo rate has now touched 5.15 per cent (lowest since March 2010) and with the RBI lending support to the government growth measures,
economists and experts feel very soon in the next meeting of MPC, it may touch below 5 per cent which many feel is a lower bound rate or
deficit which faces an almost Rs 1.45 lakh crore dent in the revenue, Mr Das said that the RBI believes government's commitments to stick
to fiscal deficit and there are several options before the government to make it up through other sources."At this point of time, it may be
noted that the government has made a statement that they will adhere to the fiscal deficit target of the current year
So, we have therefore no reason to doubt the commitment of the government to maintain the fiscal deficit number as given in the budget
And, this I would say because as you know the government government has several sources of revenue, so, whatever shortfall is expected
government has come out with the statement and going by the past track record of the government, we have no reason to doubt the statement of
the government and we go by the statement made by the government that they will maintain the fiscal deficit target," he said.Get Breaking
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