Mumbai, Dec 3
The Reserve Bank is likely to keep the benchmark interest rate unchanged at its bi-monthly monetary policy review outcome to be announced on Friday, but may revise growth estimates in view of the September quarter GDP turning out to be better than RBI’s earlier projections.According to experts, the stubborn retail inflation, which has remained above the comfort level of the RBI of around 4 per cent, will refrain the central bank from reducing interest rate on Friday.The RBI, however, is expected to revise its growth projections as the second quarter GDP numbers at (–) 7.5 per cent worked to be better than its projected contraction.In its October monetary policy statement, the RBI had said the real GDP growth in 2020-21 was expected to be negative at (-) 9.5 per cent, with risks tilted to the downside: (-) 9.8 per cent in Q2:2020-21; (-) 5.6 per cent in Q3; and 0.5 per cent in Q4.
According to the Finance Ministry’s Monthly Economic Review, “the year-on-year GDP contraction of 7.5 per cent in Q2 of 2020-21 underlies a quarter-on-quarter surge in GDP growth of 23 per cent. This V-shaped recovery, evident at the half-way stage of 2020-21, reflects the resilience and robustness of the Indian economy”.Meanwhile, Secretary General of industry body Assocham Deepak Sood said the focus of the bi-monthly review of the credit policy is expected to be ensuring adequate liquidity into the system, retaining the policy stance as accommodative.“While the cut in repo rate may not be announced tomorrow, the accommodative stance should assure the industry and the market participants about the RBI’s commitment to keep the lending rates benign to give a continuous support to growth, especially in the post-Covid period,” he said.Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com, said the RBI has taken several favourable measures this year for the real estate sector. “However, the hopes have not died down as a lot needs to be done.” “The sector is, obviously, looking at a further reduction in home loan interest rates. However, we feel that there is hardly a scope for a further rate cut this year. The sector should try to utilise the opportunities coming out of the decisions taken by the RBI in the last few months,” he said.
