RBI May Hold Short-Term Lending Rate

Despite low inflation and US tariff uncertainties, most experts expect the RBI to pause further cuts.

- AGENCIES

The Reserve Bank is likely to hold the key short-term lending rate at 5.5 per cent in its upcoming bi-monthly monetary policy on Wednesday after three back-to-back reductions, notwithstanding the headwinds to near-term economic growth in the wake of elevated US tariff uncertainties and subdued inflation trends, according to experts.

However, some experts opined that the central bank may go for another round of rate cuts as challenges to the growth outlook outweigh potential inflation risks.

The central bank has already effected three back-to-back reductions in the short-term lending rate (repo), cumulating to 100 basis points (bps).

RBI Governor Sanjay Malhotra headed a six-member rate-setting panel -- the Monetary Policy Committee (MPC) -- is scheduled to announce the next bi-monthly policy rate on Wednesday (August 6). The three-day meeting of the MPC will start on Monday.