Axis Bank predicts that the RBI will not reduce rates in 2024 due to volatile food prices and rising global prices. The bank predicts that food inflation will remain volatile, with supply shocks and erratic monsoons contributing to the situation. Despite export restrictions on wheat and rice, rising global prices have affected local prices, increasing the risk of entrenching inflation expectations.
'The RBI may look at conducting term repos and not opt for any permanent measure. They may not prefer doing outright open market purchases or cutting the cash reserve ratio,' an analyst said.
India's central bank is likely to raise its inflation projection for the current fiscal year at its June monetary policy meeting and will consider more interest rate hikes, a source said.
RBI Repo Rate Hike: After the Reserve Bank of India (RBI) upped the repo rate by 40 basis points (bps) on Wednesday, both existing and new retail borrowers would now pay higher equated monthly instalments (EMIs) for their house loans and loans against property.
Mistry said it is important for the country to maintain growth in the economy as it will lead to job creation, improvement in income levels and increase in consumption.