Expect series of repo rate cuts starting October: SBI Research

New Delhi, Apr 6: As the Reserve Bank of India (RBI) maintained the status quo in repo rate for the seventh time this week, SBI Research now expects the rate cut cycle to begin from October 2024. The repo rate is the rate of interest at which RBI lends to other banks.

Along anticipated lines, RBI kept the policy repo rate unchanged at 6.50 per cent, the seventh time in a row.

The central bank also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target of 4 per cent, while supporting economic growth.

RBI retained its inflation projection for 2024-25 at 4.5 per cent with Q1 at 4.9 per cent, Q2 at 3.8 per cent, Q3 at 4.6 per cent, and Q4 at 4.5 per cent. However, it noted that the outlook for inflation will largely be shaped by food price uncertainties (indications of a normal monsoon on one side while increasing incidence of climate shocks on other side).