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Business News/ Economy / RBI MPC 2024: ‘First repo rate cut could be on the table from…’: SBI Research Report
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RBI MPC 2024: ‘First repo rate cut could be on the table from…’: SBI Research Report

RBI expected to pause on repo rate in February MPC meeting, says SBI Research

RBI Governor-headed Monetary Policy Committee (MPC) will start its three-day deliberations on February 6. (Mint)Premium
RBI Governor-headed Monetary Policy Committee (MPC) will start its three-day deliberations on February 6. (Mint)

The Reserve Bank of India (RBI) in its February Monetary Policy Committee (MPC) review meeting is expected to again put a pause on the repo rate, according to a report by SBI Research. The repo rate is the rate of interest at which RBI lends to other banks. In its December meeting, the RBI unanimously decided to keep the policy repo rate unchanged at 6.5 per cent.

"We expect the RBI to continue pause stance in upcoming policy. Strong US non-farm payroll data and wages seem to have pushed back on market expectations for a quick pivot to rate cuts," said the research report Ecowrap as a prelude before the three-day RBI meeting that starts Tuesday.

RBI unlikely to cut rates before June: SBI

The report said that "the first repo rate rate cut could be on the table from June 2024. “Aug'24 looks the best bet now…."

We believe the stance should continue to be withdrawal of accommodation, the report added.

The report further said that the average core inflation (CPI excluding food and fuel) which was extremely sticky during 2021 and 2022 (~6% average) has eased sharply to 5% in 2023

“CPI is expected to come around 5.4% in FY24 and 4.6% to 4.8% in FY25," said the research report.

RBI MPC meeting 2024

RBI Governor-headed Monetary Policy Committee (MPC) will start its three-day deliberations on February 6, and the decision on rates will be announced on February 8 at 10 am by Shaktikanta Das. 

When did RBI last hike the repo rate?

The RBI hiked the repo rate last on February 23, when it was raised to 6.5 per cent from 6.25 per cent to contain inflation driven mainly by global developments.

January Fed Meeting: No interest rate cut announced

The US Federal Reserve in its January meeting voted to leave the key interest rate unchanged at 5.25-5.50 per cent, keeping the policy rate unchanged for the fourth straight time. The US monetary policy committee in its statement said that the recent indicators suggested that economic activity has been expanding at a solid pace.

US Fed had raised interest rates from near zero to now 5.25-5.50 per cent in the fight against inflation, post-COVID.

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 05 Feb 2024, 01:19 PM IST
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