RBI likely to hold rates for 11th straight time

May cut cash reserve ratio, lower growth and inflation projections

- ANJALI KUMARI & MANOJIT SAHA

Notwithstanding gross domestic product (GDP) growth plunging to 5.4 per cent in the July-September quarter, the Reserve Bank of India's (RBI's) six-member monetary policy committee (MPC) is unlikely to lower interest rates in its review meeting scheduled this week, according to a Business Standard poll of 10 respondents.

Only one respondent, IDFC First Bank, has anticipated a 25-basis-point (bps) cut in the policy repo rate.

After raising the repo rate by 250 bps to 6.5 per cent between May 2022 and February 2023, the MPC has kept it unchanged in its last 10 reviews.

Most respondents, however, said both growth and inflation projections for the current financial year were likely to be revised.

The RBI may lower its growth projection from 7.2 per cent and raise its inflation forecast from 4.5 per cent.

Though interest rates are expected to remain unchanged, liquidity management is likely to be an important focus of the December review, which will be announced on Friday.