RBI’s MPC meeting begins; experts expect stable policy rates
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting, which began on June 6, is set to announce its decisions soon. The three-day meeting, which was chaired by RBI Governor Shaktikanta Das, is expected to reveal significant policy changes. Experts are anticipating that policy rates will remain stable, as was the case in the April meeting where the RBI did not make any changes to the Repo Rate.
This is the second MPC meeting of the current financial year, with the results of the first meeting being announced in April. The MPC’s decisions will be shared by the RBI Governor at 10 am today. If the Repo Rate remains unchanged, it will remain at 6.5%. It is worth noting that the RBI has steadily increased the Repo Rate since May 2022, with a 250 basis point increase in the last nine months alone.
Despite the lack of rate hikes during the April 2023 MPC meeting, Governor Das had stated that the fight against inflation was not over and that it would continue. Experts believe that the RBI will make decisions based on the country’s economic needs. It is worth noting that Retail Inflation has fallen to 4.7% in April 2023 due to a drop in food and beverage prices, which is within the RBI’s tolerance band.
It is predicted that the Wholesale Price Index (WPI) for India will decrease by -0.92% this year, compared to 1.34% in March. The Wholesale Price Index-based Food Inflation has also fallen to 0.17% in April, down from 2.32% in March.
In conclusion, experts are hoping for stable policy rates during the RBI’s MPC meeting.
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