Mumbai: The RBI’s rate-setting panel will begin its three-day meeting on Wednesday to decide the next bi-monthly monetary policy amid a growth-focused Union Budget, subdued inflation and the recently concluded India-US trade deal that has eased external uncertainties.
Most experts expect the RBI to pause, having already cut the repo rate by 125 basis points since Feb-ruary last year. They argue there are no pressing risks to growth or inflation warranting further easing, though a minority sees room for one more cut to lower borrowing costs. The six-member Monetary Policy Committee, chaired by Governor Sanjay Malhotra, will announce its decision on Friday.
Bank of Baroda Chief Economist Madan Sabnavis said a pause is likely and could mark the end of the rate-cut cycle, citing tight liquidity and stable bond yields.
ICRA Chief Economist Aditi Nayar said a hold is prudent until fresh CPI and GDP data are released later this month.