As the Reserve Bank of India's Monetary Policy Committee (MPC) convenes for its bi-monthly review, the main focus is on potential interest rate adjustments. While the current sentiment suggests the RBI may maintain the repo rate at its current level, some economists are urging for a decrease to encourage lending and boost economic growth. However, concerns over persistently high inflation figures and uncertain global conditions may lead the RBI to maintain the status quo.
The Reserve Bank of India's three-day monetary policy review started on Wednesday, with expectations of a potential cut in the cash reserve ratio (CRR). The CRR is the percentage of a bank's total deposits that it is required to maintain in liquid cash with the RBI, and a reduction could signal the RBI's intention to ease monetary policy without reducing the repo rate. This move would free up significant bank liquidity and potentially stabilize the rupee.