RBI Monetary Policy February 2024: RBI Monetary Policy Committee (MPC) Meeting Latest Updates, RBI MPC Meet Feb 2024, Repo Rate News & Outcomes
RBI Monetary Policy 2024: Reserve Bank of India Governor Shaktikanta Das will announce the bi-monthly policy today (February 8) amid expectations of continued pause on the key interest rate as inflation remains near the upper tolerance level of 6 per cent.
Governor Das-headed Monetary Policy Committee (MPC) started its three deliberations on Tuesday (February 6).
The MPC is entrusted with the responsibility of deciding the policy repo rate to achieve the inflation target, keeping in mind the objective of growth.
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RBI Monetary Policy Time
Das will make the monetary policy announcement at 10 am.
Repo Rate
For a year, the Reserve Bank has kept the short-term lending rate or repo rate stable at 6.5 per cent.
The benchmark interest rate was last raised in February 2023 to 6.5 per cent from 6.25 per cent to contain inflation driven mainly by global developments.
Inflation
The retail inflation in the current financial year has declined after touching a peak of 7.44 per cent in July 2023, it is still high and was 5.69 per cent in December 2023, though within the Reserve Bank’s comfort zone of 4-6 per cent.
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Pause Expected
State Bank of India (SBI) in a report said the RBI is expected to continue its pause stance in upcoming policy.
“Strong US non-farm payroll data and wages seem to have pushed back on market expectations for a quick pivot to rate cuts,” it said, and added the first rate cut on the table could be from June to August period “looks the best bet now”.
The state-owned lender also expects the RBI will continue with the withdrawal of accommodation stance.
SBI further said the CPI is expected to come around 5.4 per cent in 2023-24 and 4.6 per cent to 4.8 per cent in the next fiscal (2024-25).
Experts across sectors are of the view that the central bank for the sixth time in a row will not tinker with the repo rate, which currently stands at 6.5 per cent mainly due to concerns over inflation.
The government has mandated the central bank to ensure the retail inflation based on the Consumer Price Index (CPI) remains at 4 per cent with a margin of 2 per cent on either side.
In an off-cycle meeting in May 2022, the MPC raised the policy rate by 40 basis points and it was followed by rate hikes of varying sizes, in each of the five subsequent meetings till February 2023.
The repo rate was raised by 250 basis points cumulatively between May 2022 and February 2023.
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RBI MPC Members
The MPC consists of three external members and three officials of the RBI.
The external members of the panel are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma. Besides Governor Das, the other RBI officials in MPC are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).
(With PTI inputs)
