Mumbai (Maharashtra) [India], June 4 (ANI): The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will begin its three-day meeting on Wednesday in Mumbai to decide on the policy interest rates.
The meeting is being held under the chairmanship of RBI Governor Sanjay Malhotra. The outcome of the meeting will be announced on Friday, June 6.
This policy meeting comes at a time when inflation in the country has been steadily declining. India’s retail inflation eased to 3.16 per cent in April, down from 3.34 per cent in March, according to official data released by the Ministry of Statistics and Programme Implementation.
With inflation now below the 4 per cent mark, the MPC is expected to take this into account while deciding the policy stance.
According to a report by SBI, the RBI is likely to announce a 50 basis points (bps) cut in the repo rate during this policy. The bank believes that a large rate cut at this stage could help revive the credit cycle and support overall economic growth.
The report said that the total rate cut during the easing cycle could go up to 100 bps. “We expect a 50-basis point rate cut in June’25 policy as a large rate cut could reinvigorate a credit cycle,” SBI noted in its report.
In the last MPC meeting held on April 7, 8, and 9, the RBI had announced a 25-basis-point cut in the repo rate, reducing it from 6.25 per cent to 6 per cent.
Governor Sanjay Malhotra had then stated, “After a detailed assessment of the evolving macroeconomic and financial conditions and outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 6 per cent with immediate effect.”
That move in April followed another 25 bps cut in February when the repo rate was reduced from 6.5 per cent to 6.25 per cent.
With two consecutive rate cuts already in place and inflation easing further, markets and economists are closely watching whether the central bank will take a more aggressive step this time with a 50 bps cut. (ANI)
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