The Reserve Bank is expected to maintain the repo rate in monetary policy on Thursday

MUMBAI: With some of the world's banks raising interest rates, the Reserve Bank of India (RBI) may choose to wait a few more months to raise interest rates, a survey has found. Inflation in India is still claimed to be relatively low. However, in view of the government's massive borrowing program, there has been speculation that the Reserve Bank will raise the reverse repo rate.

Economic recovery in India, which has been hit the hardest by emerging economies due to Corona, has just begun and no special relief has been announced in the budget.

Corona caused shutdowns and supply disruptions in the country's businesses. For two consecutive years, the RBI has kept the repo rate as low as 5 per cent.

According to a survey conducted by a news organization, 17 out of 5 economists surveyed said that the Reserve Bank of India (RBI) would raise its rates by 3 basis points in April. The remaining 15 defendants indicated an increase in June or August. One economist had expected interest rates to rise in October this year.

In view of the government's Rs 16.10 trillion gross borrowing program in the next financial year, the Reserve Bank will raise the reverse repo rate but not the repo rate, an analyst said.

The rate at which the RBI pays banks when they deposit their surplus liquidity with the Reserve Bank is called the reverse repo rate. Since May 2020, the reverse repo rate has been 7.5 percent. The reverse repo rate is expected to increase by 20 basis points.

By raising the reverse repo rate, the RBI intends to withdraw excess liquidity from the market.