In order to control Inflation RBI is taking several policies.
The main decisions of RBI will declare tomorrow.
Experts expecting that RBI will increase the repo and reverse repo rate by 0.25%
Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate.
Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks.
In November the inflation was 7.48%
In December it was increased to 8.43%
Since the petrol price again increased and the rates of several household articles is still high, I think the inflation will be again high in the coming months also.
If RBI increase the repo and reverse repo rate, then the following effects will occur
- Banks have to give more interest to RBI
- So the bank will increase interest rate again.
- Demand for money will decrease.
- Money circulation will decrease
- Profit of companies will decrease.
- Profit of banks will also decrease.
- Banking sector performance will come down.
- Market will come down.
So in all aspect this week is very crucial for us because
Tuesday: RBI DECISION.
Wednesday: MEETING OF FEDERAL RESERVE SYSTEM.
Thursday: FUTURES OPTION SETTLEMENT.
Lets hope for the best.
Regards Hari " लोका समस्ता सुखिनो भवन्तु "
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