According to a report by SBI Research, the Reserve Bank of India (RBI) is likely to cut interest rates in its September policy meeting. The research firm predicts that the RBI will reduce the repo rate by 25 basis points to 5.15%. This move is expected to provide a boost to the economy, which has been experiencing a slowdown.
The SBI Research report cites several factors that support a rate cut, including a decline in inflation, a slowdown in economic growth, and a reduction in crude oil prices. The report also notes that the RBI has been maintaining a accommodative monetary policy stance, which suggests that the central bank is willing to take measures to support economic growth.
The report states that the RBI’s decision to cut interest rates will depend on various factors, including the inflation trajectory, the growth outlook, and the global economic scenario. However, the research firm believes that a rate cut is likely, given the current economic conditions.
A rate cut by the RBI would have a positive impact on the economy, as it would reduce borrowing costs for consumers and businesses. This could lead to an increase in consumption and investment, which would help to boost economic growth. Additionally, a rate cut would also help to reduce the burden on borrowers, who have been facing high interest rates in recent times.
The SBI Research report also notes that the RBI’s decision to cut interest rates would be in line with the actions taken by other central banks around the world. Many central banks, including the US Federal Reserve, have been cutting interest rates in recent times to support economic growth.
Overall, the SBI Research report suggests that a rate cut by the RBI in its September policy meeting is likely, given the current economic conditions. The report predicts that the RBI will reduce the repo rate by 25 basis points to 5.15%, which would provide a boost to the economy and help to support economic growth. However, the final decision would depend on various factors, including the inflation trajectory, the growth outlook, and the global economic scenario.
It’s worth noting that the report is based on the analysis of the current economic conditions and the RBI’s previous actions, and the actual decision of the RBI may differ. The RBI’s September policy meeting is expected to be closely watched by market participants, as it would provide clues about the future direction of monetary policy in India.