US economic recession..! What is RBI's stance on repo rate..?

With India's economy solid and continuing to grow, the RBI is expected to leave the repo rate unchanged for the ninth consecutive time in its 2-day monetary policy decision on august 8. But what will be the RBI's stance as there is talk of cutting interest rates on an emergency basis as the US economy has reached a plateau? Beyond cutting interest rates amid growing concerns about a US economic slowdown, the US central bank, the Federal Reserve, plans to buy back $50 billion worth of government bonds over the next three months. The Reserve bank of India's bi-monthly monetary policy meeting is taking place at such an important time.
While the US Federal Reserve has started work to reduce the interest rate, the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india is set to freeze the interest rate for the 9th time. The main reason for this is that india has a larger economy than the US and lacks inflationary pressures. Currently, investment market experts expect an emergency interest rate cut in the US. Because even though inflation and unemployment rates have risen significantly, criticism has grown that the Federal Reserve has waited unnecessarily long to cut interest rates.
Wharton college professor Jeremy Siegel said the Federal Reserve is now considering cutting its benchmark interest rate by 75 basis points on an emergency basis, and by an additional 75 basis points in September. On august 6, the US began its planned Treasury bond repurchase program. It plans to buy $50 billion worth of Treasury bonds by the end of October. Also, the move is considered important as the US Federal Reserve is expected to announce an emergency interest rate cut soon. Following this, the US government plans to buy back $10 billion worth of Treasury bonds in October, topping $50 billion. This will support liquidity in the US market and what difference this will make remains to be seen.
The US Federal Reserve's emergency interest rate cut and the T-bills buyback program are expected to cause significant changes in the US trading market. With this, the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india is likely to cut the repo rate in the next monetary policy meeting.
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Sowmiya Sriram

07/08/2024 06:24 PM