The RBI will present the MPC Statement at 10 am today.
The Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI), which began on August 4, is set to conclude on Wednesday, August 6, under the presentation of Governor Sanjay Malhotra.Analysts are split on whether the central bank should implement another cut in the repo rate.
The general agreement indicates that the RBI is expected to keep its powder dry at this time and will probably refrain from announcing any reductions in interest rates. In light of new trade tensions ignited by US President Donald Trump’s decision to levy a 25% tariff on Indian products and the potential sanctions concerning Russian oil imports, India’s central bank is anticipated to maintain its stance on interest rates, as indicated by a Mint survey of 15 economists.
Let’s examine the opinions of various stakeholders regarding the potential decision of the rate-setting panel
State Bank of India:
According to a report from SBI, the central bank might lower the repo rate by 25 basis points (bps) on Wednesday, which would act as an “early Diwali” gift for citizens by facilitating the transmission of lower interest rates on loans. This would further invigorate the economy in light of the approaching festive season.
Bank of Baroda:
Dipanwita Mazumdar, an Economist at Bank of Baroda, informed the news agency ANI that the RBI may take a “wait and watch” stance this time.
Piramal Group:
Debopam Chaudhuri, the chief economist at Piramal Group, informed ANI that, “It is likely that the RBI will hold the rate steady at 5.5 percent. Nevertheless, we might see a reduction of 25 basis points in October. The RBI could also reassess its policy position in August, potentially shifting from neutral to an accommodative stance.”
Banking and market expert
Banking and market analyst mentioned that he believes there is still room for a 0.25% rate cut by the central bank.
“While there is no doubt that the RBI has to take further action to stem inflation, a further 25bps rate cut does not appear likely in the near term. That said, with inflation well within its comfort zone and tangible economic indicators improving, it may not take place in the near term.
