RBI MPC meet FY25: Repo rate to be same at 6.5%, say brokerages, banks

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The Reserve Bank of India (RBI) is likely to keep the repo rate at the same level and maintain to its policy stance of ‘withdrawal of accommodation’ in the upcoming Monetary Policy Committee (MPC) meeting next month. 

Foreign brokerages and banks, Goldman Sachs, Barclays and Morgan Stanley, have stated that the MPC may keep the repo rate on hold in the first half of the fiscal even as the central bank continued to enjoy expanding space to cut interest rates, if needed.

Goldman Sachs Research and Morgan Stanley Research see the RBI going in for two rounds of 25 basis points cut in the second half of this calendar year.   

Goldman Sachs Research has forecast one 25 basis points cut each in July-Sep 2024 and another in the Oct-Dec 2024 quarter this fiscal  year.

Santanu Sengupta, Chief India Economist, Goldman Sachs India said, “With 1HCY24 headline inflation still above the RBI’s target, we maintain our view that the RBI will keep the policy repo rate unchanged at 6.5 per cent at the April 5 meeting, sounding optimistic on growth, acknowledge Jan-Feb average core inflation at 3.5 per cent, but continue to reiterate the commitment to the 4 per cent headline inflation target”.

Upasana Chachra, Chief India Economist, Morgan Stanley said in a recent research note that it sees RBI go in for two rate cuts of 25 basis points each, but pushed the first rate cut forward from its earlier expectation of June to August/September. 

“We further expect the RBI to retain its monetary policy stance (as signalled by the comment that they will ‘remain focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth’, Chachra said. 

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