THE RESERVE BANK of India (RBI) is expected to leave the repo rate unchanged at 6.50%, fourth time in a row, in its next meeting on October 4-6, showed a poll of economists.
High inflation, which is still hovering above the RBI's tolerance band of 2-6%, has dashed the hopes of any rate cuts in the current fiscal, said most of the 13 economists polled by FE. Over 50% of the polled economists expect the central bank to pivot to repo rate cuts only from the first quarter of next financial year.
The hawkish central bank is also unlikely to tinker with its stand on liquidity as experts expect to stick to its stance of "withdrawal of accommodation".
"The Monetary Policy Committee's (MPC's) latest forecasts suggest that inflation will remain above 5% through Q1FY25, based on which Icra expects the earliest rate cut in Q2FY25. Moreover, Icra continues to anticipate the rate cut cycle to be shallow, limited to 50-75 basis points (bps)," said Aditi Nayar, chief economist at Icra Ratings.
This story is from the September 28, 2023 edition of Financial Express Mumbai.
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This story is from the September 28, 2023 edition of Financial Express Mumbai.
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