Wed Oct 09 03:41:54 UTC 2024: ## RBI to Hold Steady on Repo Rate Despite Calls for Reduction

**New Delhi, October 7, 2024:** The Reserve Bank of India (RBI) is expected to maintain its policy interest rate, the repo rate, at 6.5% during its upcoming monetary policy review meeting scheduled for October 9, 2024. This comes despite calls for a rate cut from the public, businesses, and the stock market hoping for relief from high loan interest rates.

Experts believe that the RBI will hold back on any changes due to concerns about inflation, which is expected to remain above 5% in September and October. The ongoing conflict in the Middle East is also contributing to uncertainty and potential volatility in oil prices.

While the US Federal Reserve recently cut its benchmark interest rate by 0.25%, the RBI is expected to maintain a cautious approach, keeping in line with the government’s mandate to keep inflation within a target range of 4% (+/-2%).

“We don’t expect any change in repo rate or MPC stance. Inflation is expected to remain above 5% in September and October due to the current low inflation base effect. Moreover, core inflation is rising gradually,” said Madan Sabnavis, Chief Economist, Bank of Baroda.

While some experts suggest that the RBI may consider a neutral stance and then potentially cut rates in December and February, others, including real estate industry representatives, are hoping for an immediate rate reduction.

The decision to keep the repo rate unchanged will likely be met with disappointment by borrowers looking for cheaper loans, but the RBI’s focus on managing inflation remains paramount. The outcome of the MPC meeting will be announced by RBI Governor Shaktikanta Das on October 9th.

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