Interest Rate Standoff: RBI Faces Inflation Dilemma Amid Global Unrest
The Reserve Bank is expected to maintain the current interest rate due to persistent retail inflation and global uncertainties, despite external and domestic pressures for a cut. The newly reconstituted MPC, led by RBI Governor Shaktikanta Das, faces its inaugural meeting amid complex economic dynamics.
- Country:
- India
The Reserve Bank's upcoming monetary policy review is poised to keep interest rates steady, despite mounting speculation and expectations. Experts cite ongoing concerns over retail inflation and geopolitical instability in the Middle East as reasons against an immediate rate cut.
In a reshuffle, the government recently updated the Monetary Policy Committee, appointing three new external members. As the panel convenes under the leadership of RBI Governor Shaktikanta Das, the economic community awaits its decision, especially with retail inflation targets and crude oil price fluctuations in focus.
Since February 2023, the repo rate has remained constant at 6.5%. Though some expect easing by the year's end, economists argue that persistent inflation above 5% and core inflation trends complicate any hasty policy shifts, stressing the need for caution.
(With inputs from agencies.)
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