Published by: 05 February 2020 09:03 AM
Updated: 05 February 2020 09:03 AM
The monetary policy meeting of the Reserve Bank (MPC) began yesterday. The target of fiscal deficit is increased in the federal budget. This meeting is particularly important in the context of inflation and economic stagnation
The Reserve Bank’s monetary policy meeting is held every two months. Before that there will be a meeting to discuss monetary policy. In the present context, it is very difficult for the MPC team to decide whether to reduce interest rates or continue
The results of the fiscal sixth economy meeting will be released on Thursday.
The government estimates that the country’s gross domestic product (GDP) will be five percent in the current fiscal year.
Retail inflation in December was .3.3 percent, the lowest in five years. At the previous economy meeting, no interest reduction measures were taken.
The repo rate is thus 5.15%. The fiscal deficit in the budget presented by the finance minister will be 5.7 percent higher than the previous target.
If the revenue deficit increases, the state’s orrow will leave the open market. This affects the bank’s interest rate and makes it challenging to keep inflation under control.