RBI Repo Rate: The Reserve Bank of India (RBI) may keep the key policy rate Repo Rate unchanged at 6.5 percent in the Monetary Policy Review (MPC) to be released later this week. Experts have expressed this hope. In view of the Russia-Ukraine war, the Reserve Bank started raising interest rates in May 2022 and reached 6.5 percent in February this year. Subsequently, the repo rate was kept unchanged in the last three consecutive bi-monthly monetary policy review meetings.
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MPC meeting will start from October 4
A three-day meeting of the six-member monetary policy review chaired by RBI Governor Shaktikanta Das will begin on October 4. The decisions taken at the meeting will be announced on Friday (October 6).
Inflation will be monitored
Bank of Baroda Chief Economist Madan Sabnavis said, this time the monetary policy is likely to continue with the existing rate structure and policy stance. Hence the repo rate will be maintained at 6.5%. He said retail inflation is still at a high level of 6.8% and is expected to ease in September and October, but there are some concerns over kharif production, which could push up prices.
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Hope to continue the liberal trend
Karthik Srinivasan, Senior Vice President and Group Head (Financial Reason Rating) at Icra Ltd, also expressed hope that the MPC would keep policy rates steady. He said – the tightening in cash flow seen in the second fortnight of September is unlikely to continue. Especially the hike implemented in the last policy review will free up CRR cash.
Rajan Bandelkar, chairman of real estate traders’ body Narecdo, said that RBI’s liberal stance is expected to remain unchanged during the October MPC meeting.
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