New Delhi: The Reserve Bank of India will announce its bi-monthly monetary policy today, with several experts expecting a rate hike after nearly three-and-a-half years as inflation pressures rise due to the continuing West Asia conflict.
The last repo-rate hike was in February 2023, when the RBI raised the rate by 0.25 per cent to 6.50 per cent; it then kept the rate unchanged through 2023-24 before beginning its rate-cut cycle in 2025. Currently, the RBI’s policy repo rate stands at 5.25 per cent.
Experts also suggest that the RBI may need to gradually normalise its monetary policy stance as headline inflation rises, requiring a rate hike to ensure real interest rates do not turn negative in the coming quarters. Further, the experts expect an upward revision to the RBI’s FY27 CPI inflation forecast amid elevated crude oil prices, food inflation risks and broadening price pressures.
[DD News]