However, he expects the RBI to do something more on the liquidity front as the system gets into the busy credit season now. Even fund managers and chief financial officers’ polls by business channels also don’t expect any changes in the policy rates.
Retail inflation rose to 5.08% in June as against 4.8% in May, and remaining under the 5% mark since January due to higher food and beverage inflation. Core CPI rose to 3.13% from 3.07% in May. Both rural and urban inflation rates jmped in June, with rural inflation increasing to 5.66% and urban printing in at 4.39% in June.
In a pre-policy note, Soumyakanti Ghosh of SBI Research, said he expects CPI inflation to remain below or close to 5% in the remaining months, except for September and October. For the whole of FY25, CPI inflation is likely to average to 4.6-4.7%.
Status quo likely for ninth consecutive time
If the MPC, which began its three-day customary pre-policy review meeting on Tuesday, leaves the rates unchanged, this will be the ninth consecutive time it does so, after it raised the key repo rate by 35 bps to 6.5% in February 2023 review. Two of six-member MPC in last policy meet in June had differed with the majority view to hold the rates as well as to retain the policy stance of withdrawal of accommodation.
