INSUBCONTINENT EXCLUSIVE:
In the last policy review in October, the RBI had kept the key lending rates unchanged.New Delhi: The Reserve Bank of India's (RBI's )
Monetary Policy Committee will present its bi-monthly monetary policy on Wednesday
The Reserve Bank is expected to maintain a status quo on key rates as the new strain of coronavirus - Omicron - adds to the economic
uncertainties.In the last policy review in October, the central bank had kept the key lending rates unchanged for eight consecutive times
The statement will be released by RBI Governor Shaktikanta Das at 10 am.Here's What To Expect From RBI's December Policy Review:* A poll
- done by news agency Reuters - of 50 economists showed the RBI would hold its benchmark interest (repo) rate at 4 per cent and the reverse
repo rate at 3.35 per cent at its December 8 meeting.* Repo rate is the rate at which the RBI lends money to commercial banks; while reverse
repo rate is the rate at which the Reserve Bank borrows from banks.* The reverse repo rate - was expected to climb to 4.10 per cent by the
end of next year with the first hike of 25 bps (basis points) coming in Q1 2022 and a cumulative 50 bps in the following three quarters.*
"We were previously expecting the RBI to hike the reverse repo rate 15-20 bps in December, but given the uncertainty emerging from the new
surge in consumer demand and ample liquidity, it was expected that the MPC would opt for gradual withdrawal of excess liquidity and a change
in its accommodative stance in the December policy
However, the looming threat of Omicron and the uncertainty that it has set in motion means that it is now likely that the committee will
keep key rates unchanged."* "We believe the talks of a reverse repo rate hike in the MPC meeting may be premature as RBI has been largely
able to narrow the corridor without the noise of rate hikes and ensuing market cacophony," said an SBI research report.* If the RBI
maintains status quo in policy rates today, it would be the ninth consecutive time since the rate remains unchanged
The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a
historic low.* The RBI has been asked by the central government to ensure that the retail inflation based on the Consumer Price Index (CPI)
