The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is set to announce its decision on the repo rate on October 9, 2024. While a change in the policy stance is likely, a rate cut is not expected in this meeting, despite recent global trends like the US Fed’s 50-basis point cut. The repo rate has remained unchanged at 6.50 percent since April 2023.
Consumer inflation in India cooled further to 3.65 percent in August 2024, driven by a food inflation rate of 5.66 percent. Grant Thornton said that for now, inflation has stayed below 4 percent on the dissipation of the favorable base effect, but it is likely to inch up in September. However, strong monsoons and lower global food prices are expected to contain medium-term inflation.
While the rate cuts are going full swing across the globe, including in the US and Europe, analysts expect the RBI to keep the repo rate unchanged. Though switching the stance from “withdrawal of accommodation” to “neutral” might give a hint toward future cuts possibly starting from December 2024.
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Source: Moneycontrol
News Desk
