RBI Likely to Keep Repo Rate Unchanged, Says Experts
The Reserve Bank of India (RBI) is expected to keep the repo rate at 6.5% during the upcoming three-day Monetary Policy Committee (MPC) meeting starting August 6. Experts, including Manoranjan Sharma from Infomerics Ratings, believe the rate will remain unchanged for the ninth consecutive time.
The MPC, chaired by Governor Shaktikanta Das, will meet in Mumbai to discuss key policy decisions amidst a challenging economic landscape. Governor Das has highlighted ongoing concerns about food inflation, indicating that the RBI is in no hurry to cut rates.
Recent data shows that consumer price inflation for agricultural and rural laborers has surged to 7.02% and 7.04% year-on-year respectively in June 2024. The inflation for rural laborers has been rising for the past two months, reaching 7.04% in June.
Despite steady economic growth, inflation remains a significant concern. In June 2024, inflation breached the 5% mark, reaching a five-month high of 5.08%. Wholesale inflation, measured by the Wholesale Price Index (WPI), also rose to 3.36% in June from 2.61% in May, driven by higher prices in various categories including food and manufacturing sectors.
Doubts Revealed
RBI -: RBI stands for Reserve Bank of India. It is the central bank of India, which means it controls the money supply and interest rates in the country.
Repo Rate -: The repo rate is the interest rate at which the RBI lends money to commercial banks. If the repo rate is high, borrowing money becomes expensive for banks, and if it is low, borrowing becomes cheaper.
Monetary Policy Committee (MPC) -: The Monetary Policy Committee is a group of people in the RBI who decide on the interest rates and other policies to control inflation and ensure economic stability.
Manoranjan Sharma -: Manoranjan Sharma is an expert from Infomerics Ratings, a company that provides financial ratings and analysis.
Shaktikanta Das -: Shaktikanta Das is the Governor of the Reserve Bank of India. He is the head of the RBI and makes important decisions about India’s financial policies.
Food Inflation -: Food inflation means the prices of food items are increasing. This can make it more expensive for people to buy food.
Consumer Price Inflation -: Consumer price inflation is the rate at which the prices of goods and services bought by households are rising. It shows how much more expensive things are getting over time.
Rural Laborers -: Rural laborers are people who work in the countryside, often in farming or other manual jobs. They are usually paid less than urban workers.