The Reserve Bank’s Monetary Policy Committee today began its deliberations to decide the key rates and announcements for the bi-monthly monetary policy review that will be announced by RBI Governor Sanjay Malhotra on Wednesday.
It may be recalled that RBI had started the rate easing cycle in February this year and has reduced the repo rate by 100 basis points in three tranches. Going forward, some experts expect a status quo while few others are hopeful of a 25 basis points cut.
According to a SBI Research Report, the committee may go for a 25 basis points cut in view of soft inflation, better GDP growth and tariff uncertainty. It adds that empirical evidence suggests a strong pick up in credit growth whenever the festive season has been early and has been preceded with a rate cut.
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