Monetary policy review: RBI might not cut rates today

Analysts largely expect RBI to maintain the status quo, but add there could be a rate cut later in the financial year

The six-member Monetary Policy Committee (MPC), headed by Reserve Bank of India Governor Urjit Patel, will announce its interest rate decision today. 

Analysts largely expect the central bank to maintain the status quo, but add there could be a rate cut later in the financial year. There are also some who see the rate-cut cycle, which started on January 15, 2015, by bringing down the repo rate to 7.75 per cent from 8 per cent, to have reached its end. 

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Currently, the repo rate stands at 6 per cent. The following charts illustrate why the RBI won’t be in a hurry to cut rates, even as growth is slowing. Inflation, which the central bank targets to keep under check, surprised analysts with its sharp rise in the past two readings.