RBI Seen Holding Repo Rate Steady, Raising Reverse Repo
NDTV
RBI is expected to hold its repo rate steady on Thursday but several economists are expecting an increase in the reverse repo rate
Reserve Bank of India (RBI) is expected to hold its repo rate steady on Thursday but several economists are expecting an increase in the reverse repo rate as part of a process to reduce surplus liquidity poured into markets earlier in the pandemic.
The three-day meeting of the RBI's monetary policy committee (MPC) is set to end on Thursday (February 10), having been delayed after Maharashtra declared a day of mourning on Monday following the death of legendary singer Lata Mangeshkar.
A Reuters poll of economists forecast that the RBI would raise the reverse repo rate - the rate at which it borrows from banks - to 3.55 per cent from 3.35 per cent, narrowing the corridor between it and the repo rate to 45 bps.
The repo rate is expected to go up by 25 bps at the subsequent meeting in April according to a little over half the respondents while two-thirds expect one more similar sized increase later in the year.
