The Reserve Bank of India's three-day MPC meeting began on September 29th, and the repo rate will be announced on October 1st. Analysts expect the RBI to maintain the status quo at this Monetary Policy Committee (MPC) meeting, meaning a rate cut is unlikely. However, brokerage firm Nuvma believes a rate cut remains likely.
Why does the brokerage expect a rate cut?
Nuvma said that weak demand, high interest rates, and declining inflation necessitate monetary policy easing, but the RBI would prefer to wait and assess the impact of the recent GST rate cut on demand before making a decision. The brokerage note stated, "Inflation has remained within the RBI's target range so far, but a slight increase is expected later this year. The RBI has also indicated that it wants to see the full benefits of previous rate cuts before considering further rate cuts."
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