NewKerala.com

Key Points

The RBI's Monetary Policy Committee has started its three-day meeting today to decide on policy rates. The committee will review economic conditions and inflation trends before making its announcement on Wednesday. According to an SBI report, there's a strong case for a 25 basis points rate cut given the controlled inflation environment. The final decision will be closely watched by markets and businesses for its impact on borrowing costs and economic activity.

Key Points: RBI MPC Meeting Begins Today Policy Rate Decision Wednesday

  • RBI MPC begins three-day meeting to decide on key policy rates Wednesday
  • Committee to assess economic conditions and inflation outlook before decision
  • SBI report suggests 25 basis points rate cut as best possible option
  • Inflation tracking below 2% in September and October without GST cuts
  • Markets closely watching outcome for impact on borrowing costs
  • Last policy meeting in August kept repo rate unchanged at 5.5%
2 min read

RBI MPC meeting to begin today, policy rate announcement on Wednesday

RBI Monetary Policy Committee starts 3-day meeting today, rate announcement expected Wednesday. Markets await decision on potential rate cuts amid controlled inflation.

"A 25 bps rate cut in September is the best possible option for RBI - State Bank of India Report"

Mumbai, September 29

The Monetary Policy Committee (MPC) of the Reserve Bank of India will begin its three-day meeting today in Mumbai to decide on the policy rates.

The members of the committee will gather to discuss and deliberate on the repo rates and review the prevailing economic conditions before arriving at a decision.

The meeting is scheduled to continue for three days, after which the announcement of the monetary policy outcome will be made on Wednesday, October 1.

The focus of the meeting will be on assessing the current state of the economy and determining whether any changes are required in the key policy rates to support growth while managing inflation.

RBI Governor Sanjay Malhotra will announce the outcome of the meeting on Wednesday at 10 AM.

The announcement will provide clarity on the committee's decision regarding the repo rates and other related policy measures. The monetary policy outcome is closely watched by markets, businesses, and policymakers for its impact on borrowing costs and overall economic activity.

In the last August policy meeting, in a unanimous decision, the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.5 per cent.

According to a report by State Bank of India (SBI), the Monetary Policy Committee (MPC) may announce a 25 basis points (bps) cut in this policy meeting as it is the best possible option at this stage.

The report highlighted that there is both merit and rationale in going for a rate cut in September, as inflation remains under control and the outlook suggests further moderation.

It stated, "Central Banks' communication sans cacophony, is a policy tool unto itself amidst all the chaos. No point in committing a Type 2 error (No rate cut with Neutral Stance) in September also. A 25 bps rate cut in September is the best possible option for RBI."

The SBI report highlighted that post-June, the bar for rate cuts has become higher, and any such decision will require calibrated communication by the central bank.

However, it emphasized that inflation is expected to remain benign even in FY27. Without any Goods and Services Tax (GST) cut, inflation is already tracking below 2 per cent in September and October.

CPI numbers for FY27 are now estimated to track around 4 per cent or less. With GST rationalization, October CPI could fall closer to 1.1 per cent, which would be the lowest since 2004.

- ANI

Share this article:

Reader Comments

R
Rohit P
As a small business owner, I really need lower interest rates. Working capital costs have been too high. Fingers crossed for Wednesday's announcement!
A
Aditya G
The SBI report makes sense - inflation is clearly under control and economy needs stimulus. A 25 bps cut would be perfect timing before the festive season.
S
Sarah B
While I understand the need for growth, RBI should be cautious. Global uncertainties are still high and we don't want inflation to spike again. Better to wait and watch.
M
Michael C
The timing is crucial with Diwali approaching. Lower rates could boost consumer spending and help the economy. Hope MPC makes the right call!
K
Kavya N
As a salaried employee, I'm more concerned about job security than interest rates. Hope RBI considers employment generation while making these decisions. The focus should be on sustainable growth.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50