On April 3, the three-day meeting of the rate-setting panel of the Reserve Bank of India (RBI) began. There were hopes that the central bank would raise the interest rate by 25 basis points, probably the last time during the monetary tightening cycle that started in May 2022.
An Overview
During its three-day meeting on April 3, 5, and 6, the Monetary Policy Committee (MPC) led by Reserve Bank governor Shaktikanta Das will consider a variety of domestic and global factors prior releasing the first bi-monthly monetary policy for 2023-2024.
The governor will make an announcement on Thursday regarding the decision of the six-member rate-setting panel. Although the repo rate has increased by a total of 250 basis points since May to control inflation, it has generally remained above the RBI’s comfort zone of 6%.
Increasing retail inflation and the recent actions taken by developed nation central banks, particularly the U.S. Federal Reserve, the European Central Bank, and the Bank of England, are expected to be the two main topics that the committee will discuss in detail when formulating the subsequent monetary policy.
End Note
The RBI has been given the responsibility of keeping retail inflation at 4% with a margin of +/- 2%. Notwithstanding, it neglected to keep expansion rate under six percent for three continuous quarters starting January 2022. Three members from the RBI and three from outside the country who have been appointed by the central government make up the MPC.
