The RBI MPC meeting starts with expectations on the current interest rate landscape

 The RBI MPC meeting starts with expectations on the current interest rate landscape

The RBI MPC meeting starts with expectations on the current interest rate landscape

In its last four bi-monthly monetary policies, the RBI has maintained the benchmark policy rate (repo) at that level.

The RBI MPC meeting starts with expectations on the current interest rate landscape.

On December 6, the RBI's powerful rate-setting panel convened for three days to discuss the next bimonthly monetary policy, with the assumption that the short-term benchmark lending rate will remain unchanged as GDP growth picks up speed. and controllable inflation exists.

In its last four bi-monthly monetary policies, the RBI has maintained the benchmark policy rate (repo) at that level. It last increased the repo rate to 6.5% in February, putting an end to the cycle of interest rate hikes that started in May 2022 in response to the conflict between Russia and Ukraine and the ensuing spike in national inflation brought on by the interruption of international supply chains. Hui.

On December 8, RBI Governor Shaktikanta Das will announce the MPC (Monetary Policy Committee) decision, which consists of six members.

The GDP data for Q2 2023–24 is considerably higher than the MPC’s previous forecast, and concerns about various aspects of food inflation persist. Aditi Nair, Chief Economist at ICRA, commented on the MPC's expectations, saying, "We expect Amidst the fairly hawkish tone of the MPC policy document, it has been laid on hold in its December 2023 review."

Deutsche Bank Research predicts that the RBI will maintain its 5.4 percent CPI prediction while increasing its GDP forecast for 2023–24 to 6.8% from 6.5% year over year.

In order to achieve a "effective rate hike," the RBI is expected to maintain tight liquidity, keep the repo rate and stance intact, and make sure that short-term rates stay between 6.85 and 6.90 percent.

Thanks to a boost from government expenditure and industry, India's GDP grew 7.6% faster than anticipated in the September quarter, maintaining its position as the fastest-growing major economy in the world.

According to Sanjay Bhutani, director of the Medical Technology Association of India (MTAI), the policy rate has remained constant in accordance with market expectations after the central bank's previous MPC sessions.

"We anticipate that this next meeting will have a similar result. But given the slowdown in inflation, a drop in interest rates is conceivable—it may occur as early as February or March of 2024," he said. an improvement for all businesses, but particularly for those requiring large sums of cash and extensive research, like the medical technology industry.

The Consumer Price Index (CPI) is the primary measure of retail inflation, and the government has directed the federal government to maintain it at 4 percent, with a 2 percent cushion on each side.

October had a four-month low of 4.87 percent for retail inflation, mostly as a result of decreased food costs. At its October meeting, the MPC of the Reserve Bank reduced its forecast for CPI inflation from 6.7% in 2022–2023 to 5.4% in 2023–2024.

The manufacturing partner of Daewoo India, Kelvon Electronics & Appliances, has HS Bhatia as managing director, who said that the consumer durables market would be greatly impacted by the RBI's monetary policy choices.

"The industry anticipates that that the RBI will keep interest rates unchanged or even reduce them slightly in its forthcoming assessment so that consumers get appropriate purchasing power," he said.

Head of fixed income at Union Asset Management Co. Parijat Aggarwal said worries about oil prices have also subsided and that US 10-year bonds have materially corrected from the high in accordance with incoming data and the central bank narrative. Has taken place.

"Although the MPC will focus on attaining the inflation target to 4 per cent, we're expecting the MPC to keep the rates as well as stance on hold," Aggarwal said.

Three individuals from outside the MPC and three RBI representatives make up the group. Ashima Goyal, Jayant R. Verma, and Shashank Bhide are the panel's external members. on addition to Governor Das, the two RBI representatives on the MPC are deputy governor Michael Debabrata Patra the executive director Rajeev Ranjan. PTI NKD CS NKD Anu Anu