Reserve Bank Governor Shaktikanta Das will advertise the coming set of financial policy on Friday morning amid prospects of a status quo on the standard interest rates.
The Reserve Bank of India has been holding the crucial interest rate (repo) at 6.5% since February 2023. Experts are of the opinion that the RBI’ll maintain the status quo on interest rates as affectation remains a matter of concern, though the European Central Bank and Bank of Canada have started reducing their separate key rates.
Das will advertise the decision at 10 in the morning after reflections of the RBI’s rate-setting panel, the Monetary Policy Committee (MPC), which started conversations on Wednesday.
The MPC may also refrain from rate cuts as profitable growth is picking up, notwithstanding the elevated repo rate of 6.5% prevailing since February 2023, experts said.
According to a SBI exploration paper, the central bank needs to continue the current station of pullout of accommodation. The report, named’ Prelude to MPC Meeting’ expects the RBI to cut the repo rate in the third quarter of the current financial year, nd “a similar rate cut cycle is likely to be shallow”.
It also said CPI-based retail affectation is anticipated to remain close to 5 percent in May (data to be released later this month) and decline later to 3 percent in July. Affectation is anticipated to stay below 5 percent beginning in October until the end of 2024–25, it added.
Ashish Agarwal, Director, AU Real Estate, was of the view that keeping the repo rate unchanged will insure affordability for implicit homebuyers, sustaining the instigation in the casing request.
” With consumer demand driving luxury casings, this move will support macroeconomic pointers and encourage new buyers to invest. As India’s frugality grows, the real estate sector will play a significant role, making the current repo rate policy pivotal in fueling demand and contributing to the country’s growth,” Agarwal said.
The government has commanded the Reserve Bank to insure retail inflation at 4 percent, with a periphery of 2 percent on either side. Retail inflation was 4.83 percent in April this time.
The MPC consists of three external members and three officers of the RBI. External members of the rate-setting panel are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma.
