The Reserve Bank of India’s monetary policy committee (MPC), chaired by Governor Shaktikanta Das, will make its decisions public on Friday, December 8. The bi-monthly MPC meeting began on Wednesday, and on Friday the rates decision will be made public.
will make public the MPC’s decision regarding the outlook for inflation, GDP, and key interest rates after the conclusion of the two-week meeting.
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Highlights of the meeting of the RBI Monetary Policy Committee
- The recent increase in the repo rate was made by the RBI on February 23, when it was lifted to 6.5%.
- The interest rate cycle appears to have peaked, according to the Deutsche Bank analysis, and the RBI is unlikely to raise rates any further until absolutely required. It suggested that a rate reduction is probably coming in June.
- The majority of experts concur that it is improbable that the RBI will lower interest rates during this MPC meeting. “We anticipate constrained liquidity and a hold on the repo rate at 6.5%, with the call money rate continuing to trend higher than the repo rate. Given that liquidity is still limited, we also anticipate that the position will continue to be a “withdrawal of accommodation.” The RBI might concentrate more on adjusting macroprudential standards in order to address some systemic excesses. In a note dated December 5, HSBC Chief India Economist Pranjul Bhandari stated that it had already increased risk weights on specific lending.
- The short-term rate is currently 35–40 basis points higher than the repo rate, ranging between 6.85 and 6.9 percent, as the RBI continues to maintain tight liquidity.
- A Reuters poll indicates that the RBI will maintain the key policy rate at 6.50 percent for the fifth meeting in a row.
- The policy advice is expected to have a hawkish undertone, with a continued emphasis on managing liquidity and inflation.
- The RBI may begin reducing rates in the first half of 2024, according to betting, as a result of lower economic statistics and a softer inflation figure. The odds of a rate decrease in March are about 61 percent.
- A Reuters poll indicated that India’s retail inflation in November probably increased because food prices increased, moving the country closer to the top end of the RBI’s target range of 2 to 6 percent.
- Although some estimates, such as the one from Barclays, place the figure at 6.15 percent, inflation most certainly increased at a quicker pace of 5.70 percent in November than it did in October—4.87 percent.
- India is still the main economy with the fastest rate of growth in the world. Surpassing forecasts, the GDP grew at a 7.6% annual rate during the July-September quarter. Improvements in the industrial sector and higher government spending were the main drivers of this rise.
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RBI MPC: When, where, and what to watch:
Date of RBI MPC meeting: The decision from the three-day gathering of the RBI’s rate-setting panel is expected on Friday. The meeting began on Wednesday, December 6.
The decision of the RBI MPC will be announced by RBI governor Shaktikanta Das on Friday morning at around ten in the morning.
RBI MPC Schedule: On December 8, Das will give a post-policy press conference at noon, following the MPC decision, which begins at roughly 10 a.m.
Link to live stream of the RBI MPC meeting: The governor’s policy statement will be streamed live by the RBI on either its official X (formerly Twitter) feed or its YouTube channel.