The Reserve Bank of India (RBI) began its three-day bi-monthly MPC on Wednesday. You could have to wait longer if you’re also looking for a low-cost personal or house loan. Experts are hoping that the MPC won’t adjust the repo rate in any way. Different industries, though, are calling for an interest rate reduction. However, it is doubtful that the RBI will lower the repo rate at this time due to the inflation rate above the predetermined range.
Tomorrow, we will provide details regarding the RBI’s decisions.
Shaktikanta Das, the governor of the RBI, will provide details regarding the decisions made by the Monetary Policy Committee (MPC) on June 7. According to experts, the Reserve Bank is not expected to cut the repo rate, as inflation is still a matter of concern. The repo rate has remained at a high level of 6.5 percent since February 2023. Amidst the boom in the economy, it is believed that the MPC will avoid cutting the interest rate. The central bank last raised the repo rate to 6.5 percent in February 2023 and since then it has maintained it at the same level for seven consecutive times.
Anticipated to decline to 3 percent in July.
The SBI research report suggests that the central bank should maintain its decision to abandon its accommodating posture. It is hoped that the RBI will lower the repo rate in the third quarter of the current fiscal year, however, “this cut is likely to be small,” according to the report titled “Introduction to the MPC meeting.” Additionally, it stated that the inflation rate based on the consumer price index is anticipated to be almost five percent in May before dropping to three percent in July.
Data on inflation will be released at the end of this month.
Data on retail inflation will be made available by the end of this month. It stated that less than five percent inflation is anticipated from October to the end of the financial year 2024-25. Regarding expectations from RBI, Dhruv Agarwala, Group Chief Executive Officer (CEO) of Housing.com and PropTiger.com said that India’s economy has continued its strong performance and achieved a growth of 8.2 percent in 2023-24. It was at 7 seven percent in the year 2022-23.
Who makes up the MPC membership?
“With the current inflation pressures, it is expected that the RBI MPC will maintain its current stance. There is less possibility of interest rate cuts this year,” he stated. The RBI has been tasked by the government to maintain the retail inflation rate at 4%. With a 2% margin of error. Three external members and three RBI representatives make up the MPC. The rate-setting committee’s external members are Jayant R. Verma, Ashima Goyal, and Shashank Bhide.
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