New Delhi, Aug 02: The Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel will announce the new monetary rates today. Owing to a record fall in retail inflation, there are expectations that the Reserve Bank of India will bring down the repurchase rates from 6.25 per cent by 50 basis points. Inflation fell below the 4 per cent mid-target of the RBI due to weak consumer spending and consumer inflation too has been recorded at its slowest pace, at 1.5 per cent. Industrial production also witnessed a slow output.
Chief Economic Advisor had earlier hinted about a rate cut on the cards, saying there was a paradigm shift in the inflation that was missed by all. Economists believe numerous global factors will also contribute to the RBI’s decision to go for a rate cut. The US Federal Reserve, which is expected to shrink its balancesheet in the coming weeks to boost growth after discussions in the Euro zone, will make it difficult for the RBI to introduce rate cuts.
Earlier in the day, the rupee edged down by 5 paise to 64.12 against the dollar as the latter found buying traction among importers ahead of RBI policy decision.
On Tuesday, the rupee had racked up strong gains to end at a fresh two-and-a-half month high of 64.07 against the US currency, appreciating by 12 paise on heavy dollar selling amid expectations of a rate cut by the Reserve Bank.
The Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel will announce the new monetary rates today. Owing to a record fall in retail inflation, there are expectations that the Reserve Bank of India will bring down the repurchase rates from 6.25 per cent by 50 basis points. Inflation fell below the 4 per cent mid-target of the RBI due to weak consumer spending and consumer inflation too has been recorded at its slowest pace, at 1.5 per cent. Industrial production also witnessed a slow output.
Chief Economic Advisor had earlier hinted about a rate cut on the cards, saying there was a paradigm shift in the inflation that was missed by all. Economists believe numerous global factors will also contribute to the RBI’s decision to go for a rate cut. The US Federal Reserve, which is expected to shrink its balancesheet in the coming weeks to boost growth after discussions in the Euro zone, will make it difficult for the RBI to introduce rate cuts.
Earlier in the day, the rupee edged down by 5 paise to 64.12 against the dollar as the latter found buying traction among importers ahead of RBI policy decision.
On Tuesday, the rupee had racked up strong gains to end at a fresh two-and-a-half month high of 64.07 against the US currency, appreciating by 12 paise on heavy dollar selling amid expectations of a rate cut by the Reserve Bank.
RBI to announce monetary policy today
