RBI MPC likely to retain repo rate, accommodative stance, say experts

FPJ Web DeskUpdated: Friday, June 04, 2021, 09:34 AM IST
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Reserve Bank of India (RBI) | Photo Credit: PTI

Economy watchers have ruled out any reduction in key lending rates during the first monetary policy review coming after one of worst phases of COVID-19 pandemic.

Accordingly, RBI's monetary policy committee (MPC) is expected to retain rates as well as the current accommodative stance due to growth concerns amidst resurgence of COVID-19.


Amit Gupta, Deputy CFO, Arka Fincap Limited (Formerly known as Kirloskar Capital Limited).

With the ongoing impact of the second wave of COVID 19 and keeping a check on inflation levels, it is expected that the MPC will maintain a status quo on rates along with continuing an accommodative stance to ensure economic growth. Further, it is expected that RBI will continue with Open Market Operations (OMO) , GSAP and other liquidity measures to ensure sufficient money supply and maintain interest rates in the economy.


Shishir Baijal, Chairman & Managing Director, Knight Frank India.

With the second wave of COVID – 19 that has brought about a new phase of economic uncertainties, we expect RBI to remain growth supportive and leave the policy interest rates unchanged in the upcoming policy. While rise in commodity prices have been exerting an upward pressure on input material cost and on margins, the Central Bank at the current juncture should not risk increasing the borrowing cost. With the second wave of the pandemic, the economy is in a vulnerable condition and would require further policy support from the Central Bank and the Government.

Low interest rate in the economy has been a very strong supportive factor for the bounce back in the housing sector, witnessed before the second wave of COVID 19. When the real estate sector was just about getting back on its feet, it got hit by the uncertainties of the second wave and ensuing lockdowns. The household’s sentiments have been marred deeply by the second wave of the pandemic. Any meaningful revival of the real estate sector would require sustained demand stimulant measures and easy credit conditions to promote consumption and investment in the sector”.

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