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The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) is expected to maintain the repo rate at 6.5 per cent and there would be no rate hike this fiscal, said economists at credit rating agencies and Bank of Baroda.

They also said RBI's MPC at its upcoming meeting would revise upward the gross domestic product (GDP) forecast.

According to credit rating agency CARE Ratings, the RBI will continue with its cautious pause with the repo rate at 6.5 per cent.

The repo rate is the rate at which banks borrow from the RBI.

"The economic outlook has improved significantly with a robust expansion of economic output in H1 led by upward surprise in Q2 GDP growth. The RBI may revise its earlier growth projections for FY24 up by about 20-30 bps," CARE Ratings said.

Despite the commendable overall economic performance, specific challenges persist in certain pockets, particularly in rural demand. Agricultural growth remains muted amid lower-than-expected kharif output and lower reservoir levels impacting rabi sowing, said CARE Ratings.

Inflation pressures eased but food prices remain a cause of concern. A decline in agricultural production could pose an additional upside risk to inflation figures.

According to CARE Ratings, the RBI will focus on liquidity management and personal credit. While an overall tight liquidity situation is anticipated, the RBI aims to ensure that it does not unduly impede credit growth.

The RBI is likely to continue supporting economic growth, while remaining cautious on inflation.

"Therefore, we anticipate that the RBI will keep its policy rates and stance unchanged. We do not anticipate any further rate hikes by the RBI in this fiscal year," CARE Ratings said.

"With the GDP data for Q2 FY2024 appreciably higher than the MPC's last forecast, and continuing concerns on various aspects of food inflation, we expect the MPC to pause in its December 2023 review, amidst a fairly hawkish tone of the policy document," said Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd

"The high growth witnessed in Q2 in GDP will provide assurance that the economy is on track. The low core inflation numbers in the last few months will provide comfort that there is no need to increase rates even while headline inflation is likely to be volatile in the upward direction," said Madan Sabnavis, Chief Economist, Bank of Baroda.

"Some direction on liquidity will be useful to the market as the system is in deficit for quite some time. There can be some upward revision in the GDP growth numbers though will not be very significant. We believe an upward revision of 0.1-0.2% can be expected here. Inflation forecasts may remain unchanged and, if at all there is a revision, will be upwards," he added.