In the current Business & economy conditions of the country, what will be the most probable impact on the interest rates after the Reserve Bank of India has hiked CRR rate in Q3 review of monetary policy?
(A)The interest rates may rise sharply and swiftly
(B)The interest rates may remain rise or fall
(C)The interest rates may fall swiftly
(D)The interest rates may rise but slowly
(E)There may be no impact on interest rates
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The monetary policy committee (MPC) of the Reserve Bank of India (RBI), led by Governor Urjit Patel, kept its policy rate unchanged on Wednesday, as widely expected, after inflation accelerated to a seven-month high and stronger economic growth reduced the need for monetary stimulus.
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On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.5 per cent.
Consequently, the reverse repo rate under the LAF stands adjusted to 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent.
The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.5 per cent.
Consequently, the reverse repo rate under the LAF stands adjusted to 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent.
The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
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