New Delhi. The three-day meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will begin on Monday (7 October). After the meeting, the committee chairman and RBI governor Shaktikanta Das will inform about the decision on the repo rate on Wednesday (9 October). In such a situation, the big question is whether the EMI of home loans will be reduced before the formation of the coalition government or not.

According to experts, there is no possibility of a reduction in the key interest rate repo in the RBI's MPC meeting. That is, the EMI of your loan is neither going to increase nor decrease. Experts say that retail inflation is still a matter of concern and the West Asia crisis is likely to worsen further, which will affect crude oil and commodity prices.

The repo rate remains at 6.5 percent from February 2023
Earlier this month, the government reconstituted the RBI's rate-setting committee MPC. The reconstituted committee with 3 newly appointed external members will start its first meeting on Monday. The Reserve Bank of India has kept the repo rate unchanged at 6.5 percent since February 2023. Experts believe that there is scope for some relaxation in it in December itself. The government has entrusted the RBI with the task of ensuring that the Consumer Price Index (CPI) based retail inflation remains at 4 percent (2 percent up or down).

RBI will not follow the Federal Reserve
Experts believe that RBI will probably not follow the US Federal Reserve, which has reduced benchmark rates by 0.5 percent. RBI will also not follow the central banks of some other developed countries, which have reduced interest rates.

No change is expected in the repo rate
Bank of Baroda Chief Economist Madan Sabnavis said, "We do not expect any change in the repo rate or the stance of the MPC. The reason for this is that inflation will remain above 5 percent in September and October. Apart from this, core inflation is increasing gradually." Sabnavis said that apart from this, the recent Iran-Israel conflict may deepen further, and there is uncertainty here. Therefore, the status quo is the most likely option for the new members as well. Inflation forecasts can be reduced by 0.1-0.2 percent and there is no possibility of any change in GDP estimates.

Reduction possible in December and February
ICRA Chief Economist Aditi Nair said that given the GDP growth being lower than the MPC's estimate in the initial first quarter and retail inflation is low in the second quarter, we believe that it may be appropriate to change the stance to 'neutral' in the policy review of October 2024. He said that after this the repo rate may be cut by 0.25 percent in December 2024 and February 2025.

No change in interest rate for the 10th consecutive time
Signature Global (India) Ltd. Founder and Chairman Pradeep Aggarwal said that the real estate industry and developer community along with home buyers are expecting a reduction in interest rates, but the central bank will probably keep the interest rates unchanged for the tenth consecutive time.