The Reserve Bank of India (RBI) is expected to maintain its policy repo rate of 6.5% during its June 8 announcement. Experts predict that the central bank will continue its pause on interest rates due to the easing of retail inflation in April and the potential for a further decline. This indicates the effectiveness of previous policy rate actions, according to Madan Sabnavis, Chief Economist at Bank of Baroda. Following the last MPC meeting in April, the RBI ceased its rate hike cycle. Prior to that, the central bank had increased the repo rate by 250 basis points since May 2022 in a bid to contain inflation. The MPC is meeting in the backdrop of consumer price-based (CPI) inflation declining to an 18-month low of 4.7% in April. The RBI governor also indicated that the May print would be lower than those of April. Sabnavis said that the RBI will most likely maintain its pause since inflation has come in lower.
RBI likely to maintain interest rate pause as inflation falls: experts
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