People may have to wait till October to get cheap loans. Due to the risk of inflation and no change in the rates of the US central bank, RBI may postpone the decision to cut the repo rate till the third quarter. Economists earlier believed that RBI could cut rates in the June meeting. Now, considering the risk of inflation, this decision can be taken between October and December.
Economists say that a reduction of 0.50 percent in the repo rate is expected in this entire year. At present the repo rate remains at 6.5 percent. RBI has kept the rates unchanged seven times. Inflation is still above the RBI limit.
Heat may increase RBI’s worries
Economists have slightly lowered their quarterly inflation forecast for December. RBL Bank economist Achala Jethmalani said, India’s growth rate is good. Inflation is under control. But, if food prices increase in summer, inflation may increase RBI’s concern. At the same time, it is important to keep an eye on global developments. RBI will also make its strategy based on the kind of decisions that central banks around the world, including America, will take regarding interest rates.
