RBI rate cut in Dec? Unlikely, say experts

Despite gross domestic product (GDP) growth being lower than expected for the July-September quarter, the six-member Monetary Policy Committee (MPC) may not cut the policy repo rate in the review meeting scheduled for next week due to high inflation in October, according to experts.

- ANJALI KUMARI & MANOJIT SAHA

"Consumer Price Index (CPI) inflation breaching the upper limit of the RBI's tolerance band in October (6.2 per cent year-on-year) is not a favourable backdrop for the MPC to commence the easing cycle, even as the growth outcome disappointed the MPC's expectations," said Shreya Sodhani, regional economist at Barclays, who expects the policy repo rate to be kept unchanged in the December meeting.

"That said, we do not think the MPC's decision will be unanimous, and we believe it is likely that more than one member may dissent in the meeting," Sodhani said.