Vikrant Shekhawat : Aug 04, 2024, 04:55 PM
Reserve Bank Of India: The Reserve Bank of India (RBI) may once again retain the key policy rate repo at 6.5 percent on August 8. Experts have speculated that the central bank may wait for more macroeconomic data before cutting the rate. If there is no change in the repo rate, then the general public will not get relief once again. Because if the repo rate is cut, then the impact is seen on the EMI of car and home loans. If there is no change, then there will be no change in the EMI amount.The US Federal Reserve has decided to maintain the status quo on its interest rate for the time being and has indicated that monetary policy may be eased in the coming months. Experts said that amid inflationary pressure, the RBI will keep a close watch on US monetary policy before changing its stance on the interest rate.Meeting will be held between 6-8 AugustThe Monetary Policy Committee (MPC) may also refrain from cutting rates, because even if the interest rate is raised to 6.5 percent (repo rate), economic growth is good. The MPC meeting headed by Reserve Bank Governor Shaktikanta Das is to be held between 6-8 August. Das will announce the decision of the rate setting committee on August 8 (Thursday).What do experts say?Bank of Baroda Chief Economist Madan Sabnavis said that we expect the RBI to maintain the status quo in the upcoming policy review. Inflation remains high at 5.1 percent today and will come down numerically in the coming months, but it will remain high due to the base effect. ICRA Chief Economist Aditi Nair said that high growth in FY 2023-24, coupled with inflation of 4.9 percent in the first quarter of the current financial year, is making a stance in favor of maintaining the status quo. He said that there seems to be no scope for a change in stance or rate cut in the August 2024 meeting.He said that if food inflation becomes favourable in the absence of a good monsoon and global or domestic shocks, then a change in stance is possible in October 2024. After this, interest rates may be cut by 0.25-0.25 percent in December 2024 and February 2025. Pradeep Aggarwal, founder and chairman of Signature Global (India), also said that the central bank is expected to maintain the status quo on interest rates, as retail inflation continues to pose challenges.