The RBI could soon start discussions to break away from the convention of reducing key policy rate by 25 basis points or multiples thereof shortly with stakeholders like lenders, domain experts and within the Central Bank.
“There is a need to consider interest rate adjustments, not necessarily in the conventional way of 25 bps or multiples thereof. This idea needs further debate and discussion”, earlier this month RBI Governor Shaktikanta Das had told the Monetary Policy Panel.
It could not be ascertained if the change in the policy rate cut practice of 25 bps could take shape this fiscal as the source said “there would be no rush decisions”.
He added, “if the unit of 25 basis points is not sacrosanct and just a convention, monetary policy can be well served by calibrating the size of the policy rate to the dynamics of the situation and the size of the change itself can convey the stance of policy”.
Read EquityPandit’s SBI Outlook for the Week