look news india
New Delhi: The growth rate of Gross Domestic Product (GDP) fell to 5.4 percent in the July-September quarter of the current financial year, after which there is little possibility of a rate cut by the Monetary Policy Committee of the Reserve Bank of India (RBI). The survey expressed.
This opinion has been expressed by economists in a survey. Most economists said that the growth rate and inflation estimates for the current financial year may be revised downwards. RBI had estimated the growth rate to be 7.2 percent, which can be reduced and the inflation estimate can increase to 4.5 percent.
Rates may remain unchanged in the December review meeting but liquidity management could be an important aspect. The results of the Monetary Policy Committee meeting will be announced on Friday. Excessive intervention in the foreign exchange market has significantly reduced liquidity in the banking system. Keeping this in mind, the cash reserve ratio requirement for banks can be reduced.
Given the slowdown in growth, the Reserve Bank may cut the cash reserve ratio by 25 basis points to boost liquidity, economists said in a note. Also, by increasing liquidity in the banking system before the rate cut, banks will be able to pass on the benefits of the rate cut in a better way.
Let us tell you here that last Thursday there was a cash shortage of Rs 9,489 crore in the banking system. Two months later, on November 26, there was a shortage of cash in the banking system.
In view of the increase in food inflation, there is no scope for cutting rates. Most economists say that rate cut can start from February. In such a situation, there is no possibility of rate cut in December but some measures may be announced to increase liquidity. Along with this, growth rate and inflation estimates may also improve.
