The Reserve Bank of India‘s rate-setting panel Monetary Policy Committee (MPC) started its three-day deliberations on Wednesday. The committee will finalise the bi-monthly monetary policy. Experts believe the committee might opt for a status quo on interest rate amid inflationary concerns.

Reserve Bank Governor Shaktikanta Das will unveil the resolution of the Monetary Policy Committee (MPC) on Friday.

The six-member committee, which is headed by the RBI Governor, also consists of three external members.

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Experts believe that the central bank may prefer to wait and watch before it takes a major decision on the monetary policy front. This is because RBI’s focus is also on managing inflation and supporting economic growth.

The central bank had left the benchmark interest rate unchanged at 4% at the June policy meeting. It was for the sixth time in a row that the MPC maintained status quo on interest rate.

M Govinda Rao, chief economic advisor of Brickwork Ratings, said the MPC has kept key policy rates unchanged since May 2020, after having brought them down to a record low of 4% from 5.15% through two rate cuts (75 bps in March 2020 and 40 bps in May 2020), to assuage the economic consequences of the COVID-19 pandemic.

“We expect the RBI MPC to hold the repo rate at 4% and continue to be accommodating to support the nascent recovery, in the upcoming MPC. We also expect it to sound a cautionary note and emphasise the need to closely monitor the situation,” Rao told PTI.

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Vikas Wadhawan, Group CFO, Housing.com, Makaan.com and PropTiger.com, said that he expects RBI to continue status quo in its monetary policy. He added that the historical low interest on home loans has played a huge role in gradual revival of housing demand, which was badly impacted during April-June 2020 because of the nationwide lockdown to control COVID-19.