RBI Monetary Policy meeting: The Reserve Bank of India’s rate-setting panel will meet for three days, August 8-10, next week to decide on repo rate to achieve its inflation target. The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, left key interest rate unchanged in its last two bi-monthly policy reviews in April and June this year.
RBI MPC schedule for August meeting: Outcome announcement date and time The RBI’s rate-setting panel will meet on 8-10 August and the decision will be announced on 10th August at 10 am.
Expectations from MPC meetThe panel may vote again this time for maintaining a status quo on the repo rate at 6.50 percent despite a slight rise in inflation in June. In June, India experienced a rise in retail inflation, measured by the Consumer Price Index (CPI), reaching its highest level in three months at 4.81 percent. This increase was primarily attributed to the upward movement in food prices.
The inflation rate is still well within the acceptable range set by the RBI, which has mandate to keep inflation below 6 percent.
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RBI kept rate unchanged in April and JuneIn April 2023, the MPC paused rate hike cycle after increasing the repo rate by 250 basis points (bps) since May 2022. In June policy meeting, as widely expected, the panel again went for status quo in the rate.
It is highly expected that the RBI may keep the benchmark repo rate unchanged for the third time in a row in its upcoming bi-monthly policy review next week.
Industry expectations from RBIMadan Sabnavis, Chief Economist, Bank of Baroda, said he expects the RBI to hold on to a status quo position on both rates and stance. The reason is that while inflation is presently running at less than 5 percent there would be some upside risk to this number in the coming months with prices of vegetables and pulses going up sharply, he added. “Therefore, an extended pause is expected”.
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Sabnavis further said the central bank has projected inflation to climb up to 5.4 percent for the third quarter of this fiscal, so it is unlikely that the repo rate stance may get changed till the next calendar year.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, said that on the policy stance, since the liquidity conditions have turned favorable post the announcement of the withdrawal of the Rs 2,000 note, the RBI may continue to hold on to the current stance of ‘withdrawal of accommodation,.
