RBI monetary policy: Gov Shaktikanta Das expected to hold rates at 6.50%; what experts say

Reserve Bank of India is expected to hold the repo rate at 6.50 per cent in the monetary policy committee announcements scheduled for Thursday. Governor Shaktikanta Das is expected to maintain the stance of withdrawal of accommodation. 

According to a SBI report, released ahead of the monetary policy meeting announcements, a pause is expected in the August policy. “Domestically, we believe at 6.50 per cent, we are in for a prolonged pause as seasonality of inflation should taper,” the report stated. 

The report said that there is minimal chance of changing of stance from withdrawal of accommodation to neutral, and hence they expect no change in the stance. 

Moreover, according to a Reuters poll, economists believe that the RBI would hold its key interest rate at 6.50 per cent through the end of March 2024. They expect the first rate cut to come in the second quarter of 2024. 

The poll of 75 economists showed that the central bank is expected to keep the repo rate at 6.50 per cent in the August 10 policy meeting. Majority believe that the rates would remain so till first quarter of 2024, followed by a 50 basis points worth of cuts by June end. 

According to many of them, rates are expected to remain at 6.50 per cent till March 2024, while a few predicted a cut to 6.25 per cent. 

RBI Governor Shaktikanta Das kept repo rates unchanged at 6.50 per cent in the June policy after a unanimous vote. The repo rates were left unchanged in the April meeting too, before which there was a cumulative hike of 250 basis points from May 2022 in a bid to contain inflation. 

Also read: RBI policy expectations: MPC may keep interest rates unchanged

Also read: RBI MPC meet in June: RBI keeps repo rate unchanged at 6.50%