Mumbai, August 9: Two Days after the Monetary Policy Committee, led by Reserve Bank of India Governor Shaktikanta Das, cut the Repo Rate by 35 basis points to 5.40 percent and Reverse Repo Rate at 5.15 percent, reports are arriving the RBI might consider slashing interest rates again at its October meeting and early next year. A survey, done by news agency Reuters, suggest that RBI might ease its benchmark lending rate by 25 basis points to 5.15 per cent in October.
According to the economists in the global news agency, the apex Indian monetary body opines that if the interest rates are cut in October, then there is a high probability that RBI might consider ease by 15 basis points to a near-decade low of five per cent in the first quarter of next year. However, everything is dependent on the global conditions as India is currently facing an economic slowdown. RBI Cuts Repo Rate by 35 Basis Points, Loans to Get Cheaper as Reduction in Lending Rate Marks Longest Stretch of Rate Cuts in 10 Years
Considering the point that RBI slashed that interest rates by 35 basis points to 5.40 per cent this week and the possibility of further slashing the rates in October and first quarter of 2020, it looks like the central bank would be on a repeat of a cutting spree, last seen in 2000-01. This is also being looked upon as the most aggressive amongst major central banks in easing policy.
Stating the reason for cutting down the interest rates, RBI had made an announcement that inflation would not breach its medium-term target of four per cent in the near-term. It is to be known that following a surge in foreign portfolio investors exodus, Shaktikanta Das had stated that a 25 basis points cut would have been 'inadequate in view of the evolving global and domestic macro-economic' conditions. Economic Crisis in India: Nirmala Sitharaman Chairs Industrialists' Meet, Hints at FPI Tax Waiver Soon
Earlier on Friday, Union Finance Minister Nirmala Sitharaman chaired industrialists' meeting and heard their concerns. Among the major outcomes that came out was, which the industrialists stated, that the government should roll back foreign portfolio investment surcharge soon.