RBI May Continue To Maintain The 6.5% Repo Rate: SBI Research Report

<p>Delhi, New: According to an SBI Research study, the Reserve Bank of India (RBI) is anticipated to halt the main repo rate once again before the meeting of its six-member monetary policy committee (MPC)</p>
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<p>According to the SBI Research study, the RBI is anticipated to maintain the repo rate at 6.5 percent.</p>
<p>“Considering all the possibilities, the RBI may decide to maintain the current repo rate of 6.5%. While CPI control necessitates a lower repo rate, the status quo is appropriate at this moment. Thus, the study stated that the first rate cut will not occur until Q2 of FY25.</p>
<p>“Downward revisions in US non-farm payroll, higher GDP growth expectations, decline in inflation, and excess savings still to the tune of $ 1 trillion seem to have pushed back on market expectations for a quick pivot to rate cuts,” the study said, indicating that it anticipates a pause attitude in incoming policy. At 6.50%, we see a protracted halt on the domestic front, with no rate reversal cycle until June 24.”</p>
<p>The primary causes of growth risk mentioned were external to the household.</p>
<p>“Growth keeps up its resilience. The main concerns affecting the currency, inflation, and economic dynamics are higher oil prices driving up inflation and/or tighter global financial conditions.”</p>
<p>It was resolved unanimously during the three-day MPC meeting, presided over by RBI Governor Shaktikanta Das, to maintain the repo rate at 6.5 percent in October.</p>
<p>The RBI Governor continued, quoting Das, “The MPC has estimated the GDP growth rate to be 6.5 percent in the financial year 2024, considering the economic factors.”</p>
<p>“As far as the inflation rate is concerned, the MPC’s forecast is 5.4 percent for 2023-24, taking into account various domestic issues including potential agricultural output,” he said.</p>