(Pooja Dubey, Intern Journalist) The Reserve Bank of India may once again cut the repo rate by 25bps or a quarter. The repo rate may fall to a record low of 3.75 percent. The meeting of RBI’s Monetary Policy Committee will begin on Tuesday. It will be at the lowest level since 1979.
In a poll, nearly two-thirds of economists expect the RBI to cut another repo rate on 6 August. If this happens, the repo rate could come down to a record low of 3.50 percent in the next quarter. The final decision of RBI’s Monetary Policy Committee will come on 6 August. Barclays economist Rahul Bajoria expects a cut of 25 basis points.
Annual retail inflation rise to 6.09 percent in June. It was 5.84% in March. This is above the RBI’s mid-term target range of 2-6%. Recent RBI policies focus on financial stability and the need to support growth despite price targets.
The economy remains negative until the December quarter. The economy may weaken to 5.1 percent for the full year in 2020-21. This will be the weakest performance since 1979.
RBI has cut the repo rate by 1.15 percent since February. Whereas from last year till now, there has been a cut of 1.35 percent.
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