Mumbai: Experts are anticipating that the Monetary Policy Committee (MPC) will keep the repo rate steady at 6.50 percent and sustain a stance of 'Withdrawal of Accommodation' in the forthcoming October monetary policy.

According to a poll conducted by Moneycontrol, the majority of the participating economists opined that this could be due to the decrease in Consumer Price Index (CPI) Inflation in August and steady economic activity.

Economists anticipate that the rise in crude oil prices in September may lead to inflationary pressures. However, they expect the central bank to maintain the inflation forecast at 5.4 percent while highlighting the potential risks associated with inflation.

Since the previous monetary policy, India's Consumer Price Index (CPI) inflation surged to a 15-month peak of 7.44 percent, surpassing the RBI's upper limit of 6 percent for the first time since October 2022. T

his increase was attributed to a combination of seasonal factors affecting vegetable prices, particularly tomatoes, and underlying structural inflation.

However, in August of this year, retail inflation eased to 6.8 percent, primarily due to a decline in vegetable prices.

An IDFC First Bank report noted that a significant portion of the moderation in core CPI can be attributed to a decline in goods inflation, with core Wholesale Price Index (WPI) inflation even entering negative territory, said the Moneycontrol report.

As per an ICRA ratings report, the substantial surge in global crude oil prices is not anticipated to have a significant impact on retail inflation. This is due to the expected pressure on oil marketing companies (OMCs) to refrain from raising retail prices for petrol and diesel.

In the August monetary policy, the central bank revised the inflation projection for the current fiscal year from 5.1 percent to 5.4 percent, following the breach of the upper tolerance limit.

The RBI foresees inflation at 6.2 percent in the second quarter of FY24, 5.7 percent in the third quarter, and an eventual decline to 5.2 percent in the fourth quarter.

For the initial quarter of FY25, the consumer price index (CPI) inflation is estimated at 5.2 percent.