Will the new RBI Governor entertain markets with a rate cut or will he maintain status quo today?
New Reserve Bank of India Governor Urjit Patel will announce his first monetary policy on Tuesday, which will also mark a historic shift to a Monetary Policy Committee, which will be tasked with setting the interest rates from now on.
All eyes are on the new Governor and the MPC to see what decision they will take on the interest rates later today, which will give the first real insight into their stance on key economic areas.
While certain experts expect the RBi to lower interest rates by 25 basis points in the wake of easing inflation in August and the expectation that food prices will only ease going ahead thanks to a bumper crop, there are others who are of the opinion that the central bank will maintain status quo and go for a rate cut later in December, closer to the US Federal Reserve's interest rate decision.
Experts from HSBC, Kotak Securities and Crisil said they expected a rate cut albeit in December, while Edelweiss Research and EY India expected the apex bank to cut rates in the October 4 monetary policy review. Read the full story here
Bankers like Bank of Maharashtra Managing Director and Chief Executive R P Marathe and Union Bank of India Chairman and Managing Director Arun Tiwari, said they didn't expect RBI to cut rates in the current monetary policy, according to a ZeeBiz report.
Another change that the October 4 monetary policy will bring about is the timing of the policy announcement. From now on, the RBI monetary policy review announcement will take place at 2:30 pm instead of the usual 11:00 am. The RBI Governor will then address the press from 2:45 pm to 3:15 pm.
The MPC, which is chaired by the RBI Governor, begin its two-day deliberations on Monday, to consider various factors like inflation, credit offtake and the need to propel growth, foreign trade and global economic factors, a PTI report said. The second meeting will be held today, follwoed by the policy announcement.
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