RBI MPC meet from Oct 5-7: Will RBI hike the repo rate this time?
The Reserve Bank of India's Monetary Policy Committee (MPC) is scheduled to meet from October 5-7 to deliberate on interest rates. Economists widely anticipate a 25-basis-point increase in the repo rate, pushing it to 5.5 per cent. This expectation is driven by persistent inflation and the ongoing trend of global central banks tightening their monetary policies to control rising prices.
What this means
A hike in the repo rate (the rate at which the RBI lends money to commercial banks) would directly impact banks' cost of funds, likely leading to higher lending rates for consumers and businesses. This move reflects the RBI's focus on inflation control, even if it means sacrificing some growth momentum.
Most affected: Bank lending and deposit rates, corporate borrowing
Key takeaway: Prepare for a potential increase in lending and deposit rates post-MPC, impacting both asset and liability sides of the balance sheet.
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