RBI Monetary Policy: Rate-pause may continue on CPI inflation, GDP print: Key indicators to watch

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Also Read: RBI begins three-day monetary policy meeting, outcome on Oct 6; rate sensitive sectors down According to majority of economists on D-Street, the RBI would keep its key repo rate unchanged at 6.50 per cent at the conclusion of the October 4-6 MPC meeting, with only a few expecting a 25 basis point hike. Analysts also do not expect the central bank to change its stance from ‘withdrawal of accommodation’.

However, the recent uptick in global crude oil prices and sustained economic growth are likely to keep the MPC's focus on inflation. According to SBI Research, the Indian central bank is expected to yet again pause the key repo rate this week.

“Domestically, we believe at 6.50 per cent, we are in for a prolonged pause as seasonality of inflation is tapering first...," said Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India (SBI). Informerics Ratings is also of the view that the RBI will keep repo rate unchanged for the fourth successive time.

The repo rate is the rate of interest at which RBI lends to other banks. "With inflation still remaining high, a reduction in policy rate looks remote, but in the interest of MSMEs and the economy as a whole, we expect the RBI to maintain the status quo as any further increase will start hurting the growth of the economy," said Puneet Kaura, chairman, CII Delhi State Council and MD & CEO, Samtel Avionics.