RBI will keep the repo rate unchanged today due to high food prices – ..

Mumbai: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will keep interest rates unchanged tomorrow at the end of its three-day meeting and will also hint at a cut in the repo rate in the October meeting.
The state of the global economy at the time of the MPC meeting in June has changed a lot. In the meeting held at the end of July, the US Federal Reserve has indicated to reduce the interest rate in September and the Bank of England has reduced the interest rate.
The MPC will also assess the extreme volatility witnessed in global stock markets in the current week.
Inflation is coming down at the domestic level and the monsoon is also looking good, considering this, it now seems that the Reserve Bank will cut the interest rate not tomorrow but in October.
The Reserve Bank’s target is to reduce inflation to four percent. But food inflation remains high due to high prices of vegetables. Retail inflation stood at 5.08 percent in June.
The Reserve Bank is currently monitoring the progress of the monsoon. An analyst said that a decision on the repo rate can be taken only after getting an estimate of the status of the Kharif crop. There is a possibility of a five percent cut in the repo rate in October.
A banker said that although the country’s GDP looks stable at the moment, the Reserve Bank will not take the risk of cutting interest rates at this time. The repo rate remains at 6.50 percent since April 2023.