Will the loans be expensive again next week? Know why RBI meeting is being held on 3rd November

RBI: In the month of May, the Reserve Bank announced an increase of 0.4 percent in rates between two policy reviews. With this, the prime rates have been increased by 1.9 percent 4 times so far.

Will the loans be expensive again next week? Know why RBI meeting is being held on 3rd November

RBI meeting next week

An additional meeting of the Reserve Bank Monetary Policy Committee is going to be held next week. The credit policy is reviewed in a pre-determined meeting of the MPC and steps are taken to control the flow of cash in the system, the most important being changes in key rates. In such a situation, the question arises whether there can be an increase in rates once again in November.

This question also arises because in May this year, the Reserve Bank announced an increase in rates after an unexpected meeting apart from the already scheduled policy review meeting, after which the process of increasing repos started. After the policy review held at the end of September, the next meeting of the MPC is to be held in December. In such a situation, know what will happen in this meeting of November.

What will happen in this meeting

According to Reuters news, the Reserve Bank is going to hold an additional meeting on monetary policy on November 3. In fact, in this meeting, the reasons for the failure to control inflation will be discussed, which are to be shared with the government. In fact, this meeting is being held under the Reserve Bank Act, which is conducted in the event that the central bank fails to keep the inflation rate under control for three consecutive quarters.

The government has given a target to the Reserve Bank to keep the inflation rate at 4 percent with the help of its tools, in which a limit of 2 percent has been given above and below. That is, the satisfactory limit has been kept from 2 to 6 percent. Inflation has remained above this limit for three consecutive quarters. In such a situation, the Reserve Bank will respond to the government under the rules. This will be discussed in the MPC on November 3.

Interest rates may increase in December

Although the market is already anticipating that the Reserve Bank will continue to hike rates further and in the MPC meeting to be held in December, once again an increase of half a percent can be done. And in an unexpected move, the central bank raised rates by 0.4 percent to 4.4 percent between two policy reviews. In the review meeting of June, the rates had once again increased by half a percentage point. In the review meeting of August and September, half a percent increase was made. That is, in 4 consecutive increases, the repo rates increased from 4 percent to 5.9 percent.

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