- RBI keeps interest rates unchanged even as the market was expecting a rate cut.
- This year, RBI has cut interest rates by five times, consecutively.
- India’s interest rates are already at a ten-year low.
- Most experts have been hoping for a 25 basis point rate cut this time too, some expected a 50 bps cut.
Had RBI cut interest rates again, it would have brought more money into the system, which would hike prices of essential items. The interest rate is at which RBI lends to the banks who are then expected to give out cheaper loans.
This however is a shocker for market watchers and investors who have been expecting a 25 basis point rate cut. In fact, after the dismal second quarter GDP which grew at a mere 4.5%, economists have been batting for 50 basis point rate cut.
But the decision to keep rates unchanged was 'unanimous' at the meeting held today. "Food inflation will be very high from January to March 2020," said
The country’s interest rates, after five successive cuts in all the MPC review meetings meeting this year -- is already at its lowest in ten years. But it was not enough.
And the lack of a rate cut yet again disappointed many including Sensex which dropped 100 points right after the announcement.
"With the growth projection for the current year being revised down from 6.1% to 5%, both government and the central bank should initiate some stronger measures to break the logjam particularly in the stressed sectors of the economy," said Sandip Somany, president of industry body, FICCI.