RBI MPC meet takes off
Decision on interest rates on Feb 8
image for illustrative purpose
Monetary Policy
- For almost a year, RBI kept Repo rate at 6.5%
- The benchmark interest rate was last raised in Feb 2023 from 6.25%
- Decision was to contain inflation driven mainly by global developments
New Delhi: RBI Governor Shaktikanta Das-headed rate-setting panel on Tuesday started its three-day deliberations amid expectations of continued status quo on short-term lending rates as the retail inflation remains near the higher end of the central bank’s comfort zone.
For almost a year, the Reserve Bank of India (RBI) 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. 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. Governor Das will announce the decision of the Monetary Policy Committee (MPC) on Thursday (February 8) morning. 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.
