Mumbai: State Bank of India chairman Arundhati Bhattacharya today said RBI is likely to keep repo rate unchanged in the September monetary policy review due to the uncertainty in the markets and a volatile rupee. “Overall, there is a case for a cut but given the fragility right now in the market and the volatility of the rupee, they may hold it as well,” Bhattacharya told reporters here.
She said the central bank will be closely looking at the coming first quarter GDP data, to be released on August 31, and the Index of Industrial Production numbers. Since January 2015, RBI has cut repo rate by 75 basis points.
Bhattacharya said one needs to look at the monsoon situation as it is yet to get over. “The (monsoon) situation is not as bad but it is not a very comfortable situation either. We just have to watch…,” she said. In the recently released annual report, RBI raised concerns over lower-than-expected monsoon and said it could have an impact on the growth and inflation outlook.
Talking about the economy, Bhattacharya said the country is now moving off the bottom. “We had come down very sharply on account of very many reasons. And, I think slowly we are working through those road blocks. We are de-blocking many-may of things that were stopping our road and I think it will slowly pick-up,” she said.
Bhattacharya, however, also said there was no magic wand and it was better that improvement in macroeconomic parameters happen slowly and steadily.