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RBI: Will have to wait till October for cheap loans, repo rate cut expected by third quarter
RBI: Economists say that a reduction in repo rate by 0.50 percent is expected throughout this year. At present the repo rate remains at 6.5 percent. RBI has kept the rates unchanged seven times.
For low-cost loans, people might have to wait until October. The RBI may decide to wait until the third quarter to lower the repo rate due to the possibility of inflation and the absence of a change in the US central bank's rates. Earlier, economists predicted that the RBI would lower rates during its June meeting. This decision can now be made between October and December, taking inflation risk into account.
For this year, economists predict a 0.50 percent decrease in the repo rate. Right now, the repo rate stays at 6.5 percent. The RBI has seven times maintained the same rates. The RBI ceiling on inflation remains unhit.
Economists have slightly lowered their quarterly inflation forecast for December. RBL Bank economist Achala Jethmalani said India's growth rate is good. Inflation is under control. But, if food prices increase in summer, inflation may increase RBI's concern. At the same time, it is important to keep an eye on global developments. RBI will also make its strategy based on the kind of decisions that central banks around the world, including America, will take regarding interest rates.
