look news india
Will RBI reduce repo rate in the upcoming MPC: Inflation in the country is decreasing at a slow pace and due to the slow economic condition in the US, there are indications of a reduction in the policy rate by the Fed Reserve. In such a situation, RBI can also cut interest rates in the next meeting of MPC, especially giving a big gift to the borrowers. Economists of State Bank of India (SBI) have expressed hope about this.
SBI Ecowrap report estimates that the softening of inflation indicates that the repo rate will be cut in the next monetary policy meeting. At present, good rainfall has been recorded across the country. Which is positive for the economy. In July, retail inflation rate fell by 3.54 percent. Which is the lowest in 59 months. Retail inflation rate was 5.08 percent in June.
Wholesale inflation rate at 3 month low
In July, the wholesale inflation rate was recorded at a 3-month low of 2.04 percent. Which is less than the RBI's target rate of 2-4 percent. In view of these positive signs, RBI will cut interest rates in the MPC meeting to be held in October.
There is no change in the repo rate for the ninth consecutive time
Keeping in mind inflation and global factors, RBI has kept the repo rate unchanged for nine consecutive times. Which is currently 6.5 percent. Earlier, inflation in the country had increased by 7 percent. To control this, RBI has continuously increased the repo rate. From May-22 to February-23, it increased by 2.5 percent.
GDP growth slowed down
According to SBI's Ecowrap report, along with the fall in inflation, the pace of GDP growth has also slowed down. The pace of GDP growth has been sluggish in the first quarter of the financial year 2024-25. The country's real GDP growth may be 7.0-7.1 percent in the June quarter. While the gross value added growth will decline from 7 percent to an average of 6.7-6.8 percent. The reason for the decline in growth is the decline in manufacturing activities.
