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New Delhi: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is all set to start its three-day meeting today. The monetary policy meeting will review the current interest rates. This is the first meeting since three new external members, Ram Singh, Saugata Bhattacharya, and Nagesh Kumar, were appointed to the committee.
Will RBI Cut Interest Rates?
The key question is whether home loan EMIs will be reduced, but experts believe that a rate cut is unlikely at this time. Of the 13 economists polled by Bloomberg, only three expect a small cut of 25 basis points in the repo rate. The rest predict that the repo rate will remain unchanged at 6.5 per cent, as it has been for the past ten meetings.
Retail Inflation Concern
Retail inflation continues to be a concern, and with rising crude oil and commodity prices, any changes to the repo rate are unlikely in this meeting. The RBI has kept the repo rate steady since February 2023 to keep inflation under control.
Consumer Price Index
The RBI’s target is to maintain the Consumer Price Index (CPI)-based inflation at 4 per cent, with a margin of 2 per cent above or below. While some central banks in other countries have reduced their interest rates, experts believe that the RBI is unlikely to follow this trend for now.
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Announcement Date
After the meeting concludes on October 9, RBI Governor Shaktikanta Das will announce the decision on the repo rate.
RBI Stance On Repo Rate
Everyone is waiting for the outcome, as the central bank has kept the repo rate unchanged for the last nine meetings in a row. The repo rate, which is currently 6.5 per cent, has stayed the same since the RBI decided to carefully balance controlling inflation and supporting economic growth.
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