RBI Policy Preview - What will the central bank deliver today

Bye Bye cheap loans! Be read to say this as the RBI policy meet is likely to signal and end to low rates and forecast a possible hike in February. The RBI Monetary Policy Committee is meeting December 6-8.

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A poll conducted by ET had all 23 people surveyed not expecting a rate hike in December but half forecast a rise in the reverse repo rate (rate at which RBI borrows from banks) by at least 15 basis points to 3.5%. RBI has kept rates at pandemic lows since May 2020.

Experts however are edging towards loan rates to rise by early next year as the RBI may gently suggest the end of the easy money stance in this meet. Working in favour of the 'normalisation' of rate is easing of inflation due to the cut in taxes and duties for fuel while surge in vegetable prices recently could have a temporary upswing for the retail print.

RBI will release policy outlook on December 8 at 10:00 am.