New Delhi . After the results of the general elections 2024, the situation regarding interest rates will also become clear on Friday. The meeting of the Monetary Policy Committee (MPC), constituted under the chairmanship of RBI Governor Dr. Shaktikanta Das, which decides the interest rate, has been going on for two days and will take its decision on June 07, 2024 whether to keep the repo rate (the system that decides the lending rate of banks) in the country stable at the current level or make any change in it. 

MPC has been taking shocking decisions

Many experts have said that despite the softening of inflation, RBI will once again keep the repo rate stable. However, in the past, MPC has often taken surprising decisions. Union Mutual Fund's Head (Fixed Income) Parijata Agarwal has said, "We hope that this time too MPC will be kept stable at 6.5 percent. However, some steps can be taken to increase the availability of liquidity in the market. Since there is a possibility of increasing the pace of expenditure after the arrival of the new government at the Center, there will be an attempt to make more funds available to the banking system. As far as inflation is concerned, the situation is not very much under control due to the prices of food products.''

There is little chance of change in interest rates

Vikrant Mehta, Head (Fixed Income), ITI Mutual Fund, says, "It is important to see what the MPC indicates regarding interest rates. The global situation has become more uncertain since the last meeting of the MPC. It is also being seen that other central banks of the world have also kept interest rates stable for a longer time than expected. As far as India is concerned, there is little possibility of RBI changing the interest rates right now.''

European Central Bank reduced interest rates

It is also worth noting that before any announcement by the RBI Governor on Friday, on Thursday, the European Central Bank of the European Union has decided to reduce interest rates from 4.50 percent to 4.25 percent. Deposit rates have also been reduced from 4 percent to 3.75 percent. This is the first time since 2019 that the European Central Bank has reduced interest rates.

Food inflation may increase further

In this context, some bankers have said that the situation of inflation in India is different from that of European countries. Here the number of people living below the poverty line is high, on whom even a slight increase in inflation has a big impact. The latest data of RBI shows that the situation of food inflation in the country may worsen further. A few days ago, a research report of SBI came in which a reduction in repo rate was expected in the third quarter (October-December) of the year 2024-25.