RBI MPC: Today is the last day of the two-monthly meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India for the new financial year (2024-25). It is being told that at 10 am in the morning, the Governor of the Reserve Bank will hold a press conference and give information about other decisions taken in the meeting along with the repo rate. Let us tell you that at present the repo rate has been kept constant at 6.50 percent. The repo rate was last changed by the apex bank in February 2023. Then the bank increased the interest rates by 0.25% to 6.5%. If RBI does not change the repo rates, then this will be the sixth consecutive time that the rates will be kept stable. The six-member Monetary Policy Committee (MPC) meeting includes bank governors Shaktikanta Das, Rajiv Ranjan, Michael Debabrata Patra along with Shashank Bhide, Ashima Goyal and Jayant R Verma as external members.
What is the expert’s opinion?
ICRA Chief Economist Aditi Nair said that with the National Statistical Office raising the GDP growth estimates for the first and second quarters of 2023-24, the growth rate is expected to be more than eight percent for three consecutive quarters and the Consumer Price Index (CPI) will remain above eight percent in February. There is no possibility of change in the policy rate and stance in the upcoming monetary policy review at 5.1 percent. He said that ICRA believes that the stance at the policy level is unlikely to change before August 2024. By that time the situation regarding monsoon will be clear. Besides, the stance of the US Central Bank regarding economic growth and policy rates will also become clear. Considering all this, the policy rate cut is expected to happen by October this year. This situation will happen when there is no problem at the level of economic growth.
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Apex bank will keep an eye on many issues
Ranen Banerjee, partner and principal economic consultant, PwC India, said overall strong GDP growth in the third quarter, core inflation falling below 3.5 per cent, global rise in crude oil prices, rising logistics costs and political instability globally. The escalating situation in conflicts will be the major issues for discussion. He said that although some central banks in emerging economies have started cutting policy rates, the central banks of major economies are still in a state of uncertainty. The yield differential (bond) between India and America has reduced, putting pressure on fund flows. He said that there is a strong possibility that the MPC will keep the policy rate unchanged. But there is also a small possibility of rate cut. Some members of the MPC may vote for a policy rate cut but they are not in the majority.