Mumbai (Maharashtra) [India], June 6 (ANI): The Reserve Bank of India (RBI) Governor Sanjay Malhotra is set to announce the policy repo rate today at 10 AM in Mumbai, as the three-day Monetary Policy Committee (MPC) meeting comes to a close.
This policy meeting comes at a time when inflation in the country has been steadily declining. According to the Ministry of Statistics and Programme Implementation, India’s retail inflation fell to 3.16 per cent in April, compared to 3.34 per cent in March.
The decline in inflation has brought it below the Reserve Bank’s comfort level of 4 per cent, leading to expectations that the central bank may take a softer stance on interest rates.
In the last MPC meeting held on April 7, 8, and 9, the RBI had already reduced the repo rate by 25 basis points, bringing it down from 6.25 per cent to 6 per cent.
During that announcement, Governor Malhotra had said, “After a detailed assessment of the evolving macroeconomic and financial conditions and outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 6 per cent with immediate effect.”
This was the second consecutive rate cut by the RBI. Earlier in February, the central bank had also slashed the repo rate by 25 basis points, from 6.5 per cent to 6.25 per cent, showing a clear shift toward a more accommodative policy approach.
As inflation continues to ease, analysts are closely watching whether the RBI might consider another rate cut today.
A recent report by Union Bank of India (UBI) noted that the Consumer Price Index (CPI) is expected to decline further to 3.0 per cent in May, the lowest level in six years.
This fall is mainly due to the drop in prices of cereals and pulses, although prices in other segments have begun to show some strength.
With inflation easing and two back-to-back rate cuts already made, economists and market participants are keen to see if the RBI will take a more aggressive step this time to support economic growth. (ANI)
