Don't expect RBI to cut rates, status quo may be maintained: SBI Chairman

State Bank of India (SBI) Chairman Dinesh Khara on Wednesday at an event said that the Reserve Bank of India is likely to maintain status quo in the upcoming monetary policy. The next meeting of the Monetary Policy Committee of the Reserve Bank of India is scheduled to be held on August 8-10, 2023.

"As a bank we don't don't expect rate cut, status quo is likely to be maintained by the RBI," he said at an event organised by industry body CII here.

In its June 8, policy review meeting, the Reserve Bank of India left its key interest rate unchanged for a second straight policy meeting but signalled that it wants to see inflation moderate more while keeping an eye on the monsoon.


In its latest bulletin, RBI said that food price spikes in India, typical at the onset of the monsoon, drove up headline inflation in June, corroborating the monetary policy committee's (MPC) view that the fight against inflation is far from over.

"Monetary policy has to stay the course on the arduous last leg of the journey to align inflation with the target," the RBI said in its State of the Economy article, published as a part of its monthly bulletin.

Surging food prices accelerated India's annual retail inflation rate to 4.81% in June, snapping four months of easing and erasing any chance of a rate cut this year.

However, the rain deficit in India is rapidly closing amidst a highly cyclone-skewed distribution, while manufacturing and services activity remains in expansion, albeit with some sequential moderation in June, the RBI said.

On the global growth front, it said momentum appears to be stalling, especially in manufacturing and investment, since though headline inflation was moderating, core inflation was staying stubborn.

It, however, reiterated its confidence in India's prospects.

"The Indian economy is poised to be the fastest growing major economy in the world despite some sequential moderation in economic activity in June," the central bank said.