RBI to cut interest rates? - Fusion - WeRIndia

RBI to cut interest rates?

RBI to cut interest rates?

A recent report has stated that the Reserve Bank of India (or RBI) will be likely to cut its interest rates in its upcoming policy meeting. This will be held today, and the full meeting will last two days, beginning on August 1st.

After the conclusion of the Monetary Policy Committee, which makes all of the decisions on the interest rates of the RBI, analyzers believe that there will be a 25 basis points cut.

All of this is due to the recent drop in inflation, which is at a record low thanks to the massive improvement of the economy.

Although the drop in inflation has not brought it to an all-time low, it has dropped a significant amount compared to the recent inflation highs.


Therefore, the RBI will likely lower the interest rates from the current 6.25%, which has been held constant under high inflation rates.

Interest rates will also likely be lowered due to the sharp increase of the prices on certain foods, such as the price of tomatoes.

The State Bank of India (or SBI) has also reported inflation risks to be low, and the retail inflation will also be at lower rates. It will be below 2% for the next month, below 3% from August to September, below 4% from October to November, and from 4% to 4.5% from December to March.

RBI to cut interest rates?

RBI to cut interest rates?

 

Additionally, the interest rates for loans may also be cut to a new low. The RBI may even drop loan interest rates to a record low over time.

However, sharp, aggressive interest rate drops will be unlikely in the near future, until inflation gets to even lower rates.

Yet these reports show that the Indian economy is certainly on the rise, albeit slowly. However, this current positive trend gives hope for even more economic improvements in the future.

Image Reference: FPIndia, Bankbazaar

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