Economists divided over RBI MPC outcome

Majority expect status quo, while SBI's Soumya Kanti Ghosh, Nomura's Sribalasundaram see 25 bps rate cut

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MINT Road observers are divided over the outcome from the three-day monetary policy committee (MPC) meeting beginning Monday, with some expecting the rate-setting panel delivering yet another surprise rate cut on Wednesday, while others expecting the status quo to continue.

Majority of the economists are expecting the status quo at 5.50, while SBI chief economist Soumya Kanti Ghosh and economist at the Japanese brokerage Nomura, Nathan Sribalasundaram, expecting a 25 bps repo rate cut given radically altered external conditions with a flat 50% tariffs on Indian exports to US, along with the H1-B visa fee hike and the 100% tariffs on branded drug exports to the world's largest market.

Since February, Governor Sanjay Malhotra has delivered 100 bps rate reduction through three rate cuts with the 50 bps cut in June being the most aggressive and unconventional.