The meeting of the Monetary Policy of Reserve Bank of India has started. This meeting will emphasize whether interest rates should be cut on October 1 or not. How much should be estimated to estimate the data of inflation. How much growth can grow? This will also be estimated. By the way, it has already been expected in the Reuters Poll that the RBI may hold interest rates. On the other hand, City, Barclays, Capital Economics including SBI have expressed the possibility that this time the RBI can cut interest rates despite all the obstacles.
This means that RBI can surprise common people by cutting interest rates again. In the month of June, the RBI worked to give mega boosters to the common people after the policy meeting. In the same way, the initiative from Diwali can get the best gift from RBI.
RBI has cut the policy rate by 1 percent in rates from the beginning of the year so far. In the months of February and April, RBI cut 25-25 basis points. After that, by cutting 50 basis points in the month of June, the country was given great relief in loan EMI. In the month of August, the RBI held interest rates. Also, the monetary policy was neutralized. Since then, financial conditions have become strict.
America Kul Tariff on India has come to 50 percent. Also, the H1B visa fee has been increased. Because of which the rupee has come to the all time lower level. In such a situation, there is also some reasons that RBI may have to uphold the August decision. Let us also tell you what different experts have to say…
What is the estimate of City Bank
City economists have written that the October meeting has started again. It is said that the RBI may opt for the “insurance” rate cuts to avoid external shocks, or adopt a soft stance with a clear indication of taking action soon. The three -day meeting of RBI ends on 1 October. According to the city, we are a little bitter that RBI will choose the option to cut insurance rates. ”
In the June quarter, India’s economy had increased at a rate of 7.8 per cent above expected, but some economists say that the figure may extend an exaggeration of economy as its calculation was after adjusting inflation. The government has increased the fiscal assistance by making income tax relief and GST rates rational, but the tariff and weakness of the rupee have blurred this possibility. Trade tension with the US, which includes 50% tariff and high visa duty on Indian exports, has increased many types of concerns.
This is an estimate of capital economics
Capital Economics said that the US tariff is preparing a base to cut the rate cut for RBI, as well as a soft outlook on inflation. Also, the next week has predicted cut rates and another cut in December. Inflation has been below the RBI’s 4 per cent target, and economists hopes to reduce inflation further due to cuts in GST rates. Most economists believe that an increase in estimates of the growth rate of the whole year and decrease in inflation will be reduced.
SBI has also expressed the possibility of cut
SBI Chief Economist Soumya Kanti Ghosh said in a note that the cut in interest rates will establish RBI as a visionary central bank, but after June, he stressed the need to communicate deliberately, given the high standard of relaxation in interest rates after June. He further said that inflation will remain normal even in FY 2027. Nevertheless, most economists suggested that RBI may prefer to wait till December, that too when trade talks with America move forward positively. India’s bonds and overnite index swap markets have not yet evaluated interest rate cuts on Wednesday, and traders estimate that if the central bank surprises with monetary relaxation, it will accelerate.
There may be a cut of 25 basis points
All agencies ranging from SBI believe that RBI can deduct 25 basis points in MPC interest rates. After which the repo rate of RBI will be 5.25 percent. If this happens, interest rates may be cut by 1.25 percent in the current year. At the same time, some have estimated such a cut in interest rates in the month of December. In such a situation, a cut of 1.50 percent can be seen in the current year.