Reserve bank of india
Even though the data of inflation in the month of July has not been revealed, but the inflation data of June is in front of the Monetary Policy Committee of Reserve Bank of India. In the month of June, retail inflation reached the lower level of about 77 months. In such a situation, the question before the RBI is whether the interest rates should be cut or not. The question is the biggest, how much interest rates should be cut. There is also the reason for this. RBI had cut interest rates by 50 basis points in June. Before that, in the months of February and April, interest rates were cut 25-25 basis points.
This means that the RBI policy interest rate has come down from 6.50 percent to 5.50 percent. Now that inflation in the country is close to 2 percent, the RBI MPC has started the churning of how much interest rates are cut in the month of August. On August 6, the RBI Governor, who is also the Cheyaman of the MPC, will announce. However, the recent report of SBI states that the repo rate may be cut by 25 basis points. At the same time, some suppressed tongue is feared by 0.50 percent.
At the same time, some experts are performing the next policy simultaneously. He believes that a total of 1 percent cut can be seen in the months of August, October and December. This means that a cut of 50-25-25 basis points can be seen. This means that by the end of the year the repo rate can come at 4.5 percent. Which will be a matter of great relief in itself. Experts also say that in the month of August, the RBI can reduce its inflation estimate even more. Let us try to understand in detail what the RBI can do on August 6.
RBI churning started
From Monday, August 4, the RBI MPC’s repo rate, inflation and churning on GDP have started. Ever since Sanjay Malhotra took over as RBI Governor, RBI MPC has taken a lot of attention to the interests of common people. From February to June, the interest rates have been seen by 1 percent. In the month of February, 25 basis points have been reduced by cutting by 0.25 percent in April and 0.50 percent in June.
How much to cut in the month of August is the most Yaksha question before the MPC. However, SBI has estimated a cut of 25 basis points. On the other hand, 75 percent of the people have said in the rooters pole that this time there will be no cut in repo rate. This is the biggest question in front of everyone, what is the RBI going to do on August 6. Because in the month of June, no one thought that the RBI would cut 50 basis points.
What did SBI report say?
The SBI Research report states that the MPC of the Reserve Bank of India can cut 25 basis points. SBI said in its report that we have analyzed the previous trends of loan growth in the context of cuts in repo rate around Diwali. We have found that any cut in repo rate before Diwali increases loan growth even faster till Diwali. SBI has tried to prove its talk with an example. In which it has been said that in August 2017, due to the cut of 25 basis points in the repo rate, an agisement of 1956 billion was seen by the end of Diwali.
Out of which about 30 percent stake was in personal loan. The report said that since February 2025, RBI has already cut 100 basis points (1%) in the repo rate, which has provided relief to the borrowers as well as those banks whose credit book has improved. The interest rate of home loans connected to the external benchmark (EBLR) has declined by about 1 per cent from February, while banks have also seen an increase in home loan demand.
The report said how much RBI has done the repo rate and the home loan rate related to EBLR has declined the same. We believe that this has given a boost to the home loan portfolio of banks. As far as the speed of decrease in borrowing rates is concerned, public sector banks have been faster than private sector banks. The report said that banks have amended the same proportion in their repo-linked EBLR. Many banks have reduced their MCLR rates by 10-65 basis points.
Reuters pole prediction
According to the last week’s survey by Reuters’ economists, after surprisingly more deducted in June, the Reserve Bank of India can maintain the repo rate at 5.50 per cent in the August policy meeting and is expected to reducing it by the end of the year. This means that there is no change in the repo rate in the months of August and October. Drinking inflation has given scope to cut rates to policy makers.
The central bank took a neutral stance in June, suggesting that further rates cuts would depend on Asia’s third largest economy figures. India’s largest trading partner, the trade deal with the United States is still in talks, but recently the US has announced a 25 percent tariff.
About 75 per cent of the economists in the survey, ie 44 out of 57, estimates that the RBI will maintain the repo rate at 5.50 per cent in the August 6 policy meeting. The rest of the economists had estimated a cut of 25 basis points in the Reuters Survey of 18-24 July. The majority of the majority of maintaining the repo rate in a quick Reuters Survey conducted in June after a 50 basis point cuts are slightly less than 96 percent. Most economists estimate that RBI will cut rates by the end of the year by 25 basis points, which is a change compared to June, when most economists expected no change in rates by the end of the financial year at least.
RBI Governor Sanjay Malhotra had said in the July of July that policy makers in future will take decisions of interest rates on the basis of inflation estimate instead of existing data. The expensive an average of 3.4 per cent in this financial year is estimated to be lower than the current estimate of 3.7 per cent of the central bank. The growth rate in this financial year was expected to be 6.4 percent on an average and 6.7 percent next year.
Can there be a cut of 50 basis points again?
This question is quite big. Because everyone is afraid to say that in the month of August, there will be a cut of 50 basis points. But the question is why this cannot happen. When this or wealth global research director Anuj Gupta spoke to the TV 9 Hindi Digital team, he said that 25 basis points are being set a minimum bar. This means that the RBI will cut 25 basis points in the month of August. Now the question is, why can’t 50 basis points do?
Anuj Gupta says that RBI can surprise everyone once again by cutting MPC 50 basis points. There is also a reason for that. In the current era, there has been a change in circumstances due to tariff with America. In the past, the RBI has cut interest rates in an aggressive manner to handle the country’s economy. In the year 2020, there was only two cuts, but there was a decrease of 115 basis points in the repo rates. Prior to that, Sojal had reduced by one and a half per cent due to three consecutive cuts in 2008.
There may still be 1 percent reduction
Now the biggest question is that the last three meetings have seen a cut of one percent, whether the meeting of August, October and December can also be seen by one percent. On this, Anuj Gupta says that in the next three meetings, interest rates can be seen in the ratio of 50-25-25 or 25-50-25. He said that due to reduced external supply of 25 percent tariffs and increase in domestic supply, prices can be seen. Which will be seen as a cut in inflation. RBI MPC may have to cut continuously. Now it will be seen whether the RBI cuts by 0.25 percent or 0.50 percent. Or the survey of Reuters will prove to be correct.