Finance ministry On Monday, he said that the Reserve Bank of India (RBI) has scope for further cuts in repo rate. The reason for this is to be significantly below the average target of 4 percent of retail inflation (inflation). Retail inflation based on the Consumer Price Index (CPI) remained below 4 percent consecutive percent since February and in May it came to a 6 -year low to 2.82 percent. The monthly review report of the Finance Ministry said, “The main inflation remains soft and overall inflation is significantly below the RBI average target of 4 percent. This causes scope for further reduction in repo rate. ”Let us tell you that due to reducing repo rate, all loans including home loans, car loans become cheap, which also reduces the monthly EMI of common people.
RBI has cut repo rate by 1 percent this year
The RBI has cut the repo rate by 1 percent from February to June this year. The next meeting of RBI’s Monetary Policy Committee (MPC), which determines the repo rate, will be held from 4 to 6 August. The RBI has estimated the gross inflation rate of 3.4 percent for the second quarter of the financial year, while the actual inflation in the first quarter was lower than the RBI target. The government has given the RBI the responsibility of keeping retail inflation at 4 percent with 2 percent decrease. The report said, “It seems that inflation in the entire financial year will be lower than the central bank’s 3.7 percent estimate.”
Revenue source strengthened despite tax deduction
The report also states that after the increase in production by OPEC (organization of oil exporting countries) and its colleagues, the price of global crude oil is expected to be low. OPEC and its colleagues increased the production by 5,48,000 barrels per day in August, which is different from the declared production increase in the previous months. On the fiscal front, both the central and state governments have maintained the capital expenditure, maintaining the goals of fiscal strength. The report said that despite the tax deduction, the revenue sources remain strong and the double digits continue to increase.
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