Some SBI economists say that because Omicron is a big threat, the RBI should keep the key rates the same. Just a few days before the Reserve Bank of India‘s (RBI) monetary policy committee meeting in December 2021, State Bank of India’s (SBI) economists have suggested delaying the normalization of liquidity by raising the reverse repo rate, which would mean that key rates would stay the same. Just a few days before the Reserve Bank of India’s (RBI) monetary policy committee meeting in December 2021, State Bank of India’s (SBI) economists have suggested delaying the normalization of liquidity by raising the reverse repo rate, which would mean that key rates would stay the same.
A decision on repo and repo rate changes will be made on December 8, the last day of the meeting. SBI economists said that taking this “prudent” step now will give the economy more room to grow. The Reserve Bank of India has been taking other steps to get rid of extra money, which has led to a huge drop in the amount of extra money in recent months, SBI Research said in a note. When it talked about how the reverse repo tool can be used, it said that it can be used for other things than just monetary policy announcements.
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Senior economist Soumya Kanti Ghosh said in a weekend note that the situation is still changing, so reverse repo rates may stay the same when SBI Group makes its policy announcement later this week. This could happen because the situation is still changing. This is taking into account that the effective rate has already been raised by VRRRs (variable reverse repo repurchases), and the amount and length of the same can be changed to achieve the desired result, he said. Also, since the October policy, the amount of money parked in the overnight fixed reverse repo has dropped from 3.4 lakh crore to 2.6 lakh crore, which is a very small amount.
