Aug 06, 2024 03:00 PM IST
The repo rate has been maintained at 6.5 per cent since it was last increased in February 2023.
The Reserve Bank of India (RBI) started its three-day monetary policy committee (MPC) meeting in Mumbai today (August 6). The meeting will conclude on August 8 after which the RBI will announce its decisions on repo rate and other matters. The repo rate has been maintained at 6.5 per cent since it was last increased in February 2023.
Will repo rate be changed by RBI this time?
It is widely expected by experts that repo rate will remain unchanged for the ninth consecutive bi-monthly policy review as inflation in India remains above RBI’s target range. This means that it is unlikely that the central bank will implement policy cuts until inflation reaches the target of 4 per cent. The RBI may consider rate cuts in the October meeting.
What experts predict on RBI MPC meeting?
Banking expert Ashutosh Khajuria said, “Monetary Policy Committee (MPC) may continue to hold the policy signalling Repo rate and wait for Consumer Price Inflation to decisively fall below 4 per cent, the target rate. For the present, the continuation of the current stance is widely expected. MPC in India may change the stance and rate action by the beginning of the second half of the year in their October meeting at the earliest.”
Suman Bannerjee, Hedonova CIO, said, “Amid persistent inflationary pressures, particularly due to rising food prices, the Reserve Bank of India (RBI) is expected to maintain the current benchmark rate. This cautious approach is designed to balance economic growth with price stability. By holding the rate steady, the RBI aims to mitigate inflation without stifling economic momentum. Rising food prices have been a significant contributor to inflation, prompting the central bank to adopt a wait-and-watch strategy. This decision underscores the RBI’s commitment to ensuring long-term price stability while fostering a conducive environment for sustainable economic growth.”