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RBI MPC Meeting LIVE Updates: RBI decides to double the gold loan under bullet payment scheme to Rs 4 lakh for Urban Cooperative Banks
06 Oct, 2023 | 11:34:51 AM IST
RBI MPC Meeting LIVE Updates: The monetary policy committee of the Reserve Bank of India (RBI) in its October review meeting unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, thus maintaining status quo for the fourth straight occasions.
Shaktikanta Das emphasised that the central bank is concerned and it has identified high inflation as a major risk to the economy.
Das added that RBI is committed to aligning India's headline inflation at 4 per cent level.
RBI maintained the stance - "withdrawal of accommodation". Das noted that 5 out of the 6 MPC members are for remaining focused on "withdrawal of accommodation" in monetary policy stance.
In response to the Russia-Ukraine conflict, the Reserve Bank initiated a gradual policy rate increase starting in May 2022, ultimately reaching 6.5 percent by February of this year. Over the past three bi-monthly monetary policy reviews, the rate has remained unchanged. The Monetary Policy Committee (MPC), led by RBI Governor, commenced discussions on October 4.
The government has tasked the Reserve Bank with the responsibility of ensuring that Consumer Price Index (CPI)-based retail inflation remains within 4 percent, with a margin of 2 percent on either side. In August, retail inflation stood at 6.83 percent, exceeding the RBI's comfort level.
During an unscheduled meeting in May 2022, the MPC raised the policy rate by 40 basis points, initiating a series of rate hikes in subsequent meetings until February 2023. Cumulatively, the repo rate was raised by 250 basis points between May 2022 and February 2023.
Shaktikanta Das emphasised that the central bank is concerned and it has identified high inflation as a major risk to the economy.
Das added that RBI is committed to aligning India's headline inflation at 4 per cent level.
RBI maintained the stance - "withdrawal of accommodation". Das noted that 5 out of the 6 MPC members are for remaining focused on "withdrawal of accommodation" in monetary policy stance.
In response to the Russia-Ukraine conflict, the Reserve Bank initiated a gradual policy rate increase starting in May 2022, ultimately reaching 6.5 percent by February of this year. Over the past three bi-monthly monetary policy reviews, the rate has remained unchanged. The Monetary Policy Committee (MPC), led by RBI Governor, commenced discussions on October 4.
The government has tasked the Reserve Bank with the responsibility of ensuring that Consumer Price Index (CPI)-based retail inflation remains within 4 percent, with a margin of 2 percent on either side. In August, retail inflation stood at 6.83 percent, exceeding the RBI's comfort level.
During an unscheduled meeting in May 2022, the MPC raised the policy rate by 40 basis points, initiating a series of rate hikes in subsequent meetings until February 2023. Cumulatively, the repo rate was raised by 250 basis points between May 2022 and February 2023.
1 New Update
RBI MPC Meeting LIVE Updates: Questionable price stability and tight domestic financial conditions
"Despite a pause, the RBI MPC’s hawkish language suggests that price stability is questionable, and domestic financial conditions will remain tight. Policymakers are also mindful of the tight external financial conditions and narrowing (IN-US) rate differentials, notwithstanding the comfortable reserves cushion and impending foreign bond inflows. Post-decision, IGBs were under a cloud, as OMOs could be tapped for liquidity management," said Radhika Rao, Executive Director and Senior Economist, DBS Group Research.
RBI MPC Meeting LIVE Updates: 'It is a turning pitch and we will play our shots carefully'
RBI expects ease in liquidity conditions on the back of release of the remaining impounded I-CRR funds and pickup in government spending. Whereas increase in currency demand due to festival season may act as a counterbalancing factor.
RBI Guv said that it is a turning pitch and we will play our shots carefully.
We may have to consider OMO-sales (Open Market Operation sales) to manage liquidity, consistent with the stance of monetary policy, said RBI Guv. The timing and quantum of such operations will depend on the evolving liquidity conditions, he added.
RBI Guv said that it is a turning pitch and we will play our shots carefully.
We may have to consider OMO-sales (Open Market Operation sales) to manage liquidity, consistent with the stance of monetary policy, said RBI Guv. The timing and quantum of such operations will depend on the evolving liquidity conditions, he added.
RBI MPC Meeting LIVE Updates: RBI wants banks to lend funds to peers, not park them at RBI facility
Recently, banks have shown a preference to place funds under the overnight SDF instead of offering them in the main 14-day variable rate reverse repo (VRRR) operations. As per RBI, It is imperative that banks assess their actual liquidity requirements over the reserve maintenance cycle and bid accordingly in the auctions under main 14-day VRRR operations.
RBI said that it would be desirable that banks having surplus funds explore lending opportunities in the inter-bank call market rather than passively parking funds in the SDF at relatively less attractive rates.
RBI reasoned this with the fact that greater volume of call money transactions would not only help in deepening the inter-bank money market but also lower the recourse of deficit banks to the MSF.
RBI said that it would be desirable that banks having surplus funds explore lending opportunities in the inter-bank call market rather than passively parking funds in the SDF at relatively less attractive rates.
RBI reasoned this with the fact that greater volume of call money transactions would not only help in deepening the inter-bank money market but also lower the recourse of deficit banks to the MSF.
RBI MPC Meeting LIVE Updates: Decoding the CPI inflation math
With near-term inflation is expected to soften on the back of vegetable price correction, especially in tomatoes, and LPG prices. The future trajectory will be conditioned by a number of factors.
After looking at these factors, CPI inflation is projected at 5.4 per cent for 2023-24, with Q2 at 6.4 per cent, Q3 at 5.6 per cent and Q4 at 5.2 per cent with risks evenly balanced. CPI inflation for Q1:2024-25 is projected at 5.2 per cent.
- For kharif crops, the area sown under pulses is below the level
- Kharif onion production needs to be watched closely
- Demand supply mismatches in spices to keep prices at elevated levels
- Inflation will also be shaped by El Niño conditions
- Global food and energy prices will also put a mark
- Global financial market volatility
After looking at these factors, CPI inflation is projected at 5.4 per cent for 2023-24, with Q2 at 6.4 per cent, Q3 at 5.6 per cent and Q4 at 5.2 per cent with risks evenly balanced. CPI inflation for Q1:2024-25 is projected at 5.2 per cent.
RBI MPC Meeting LIVE Updates: A look at other indicators
- South-west monsoon rainfall recovered during September and ended 6 per cent below the long period average.
- The acreage under kharif crops was 0.2 per cent higher than a year ago.
- IIP rose by 5.7 per cent in July
- Core industries output expanded by 12.1 per cent in August
RBI MPC Meeting LIVE Updates: On oil shocks
Monetary policy has to be in absolute readiness to take appropriate and timely action to prevent any spillovers from food and fuel price shocks to underlying inflation trends and risks to anchoring of inflation expectations. These are non-negotiable necessities.
RBI MPC Meeting LIVE Updates: SDF, MSF and Bank Rate
The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
RBI MPC Meeting LIVE Updates: On Internal Ombudsman Scheme
Internal Ombudsman Scheme to be further fine-tuned to safeguard the interest of customers, said Governor Das.
RBI MPC Meeting LIVE Updates: Key macro points
RBI Monetary Policy Committee unanimously decided to keep repo rate unchanged at 6.5 pc, announced Governor Shaktikanta Das. The central bank retained the GDP growth forecast for the current fiscal at 6.5 pc with risks evenly balanced. RBI also maintained retail inflation at 5.4 pc for 2023-24.
RBI MPC Meeting LIVE Updates: Remittances, CAD and more
On the remittances front, the rise of 5.8% YoY in Q1 FY24 was registered, whereas the current account deficit declined to 1.1% of GDP. The foreign exchange reserves grew by a net $24.4 bn. A turnaround was witnessed in inflows under external commercial borrowing, with $4.5 billion in Apr-Aug.
RBI MPC Meeting LIVE Updates: Managing liquidity
RBI may have to consider open market operations with regard to G-secs to manage liquidity, announced Das.
RBI MPC Meeting LIVE Updates: PIDF to cover PM Vishwakarma scheme beneficiaries
Payments Infrastructure Development Fund scheme extended by 2 years. The coverage is expanded to include PM Vishwakarma scheme beneficiaries, announced RBI Guv.
Limit for gold loans increased from Rs 2lk to Rs 4lk in respect of urban cooperative banks, announces RBI Guv
RBI MPC Meeting LIVE Updates: Banks having surplus funds should consider looking at lending to interbank call market, says RBI Governor
RBI MPC Meeting LIVE Updates: India's forex at $586.9 bn as on Sep 29
RBI MPC Meeting LIVE Updates: I-CRR being discontinued in a phased manner, says Das
RBI MPC Meeting LIVE Updates: Shaktikanta Das on banking system
RBI said that the banking system continues to be resilient. Financial indicators of NBFCs are in line with the banking system, as per the latest data in June.
RBI MPC Meeting LIVE Updates: 'Inflation driven by food prices'
RBI pointed out that heightened inflation levels were largely driven by food prices. Vegetables contributed to a third of CPI inflation in the month of July and a fourth in the month of August.
RBI MPC Meeting LIVE Updates: Alert on 'oil front'
RBI Guv Das said the monetary policy has to be in absolute readiness to avoid spillovers from oil shocks.
RBI MPC Meeting LIVE Updates: Core inflation softened to 4.9 %. eased by 140 bps
RBI Guv added that further easing in core inflation is required. Future trajectory of inflation to be determined by several factors, said Das.
RBI MPC Meeting LIVE Updates: RBI maintains inflation outlook at 5.4%
- Q2- 6.4,
- Q3- 5.6,
- Q4- 5.2%
- FY25 Q1- 5.2%
RBI MPC Meeting LIVE Updates: FY 24 real GDP growth maintained at 6.5%
RBI MPC Meeting LIVE Updates: GDP for Q1 FY25 - 6.6%
RBI MPC Meeting LIVE Updates: PMI for mfg remained robust in sept, says RBI Guv
In September, manufacturing operations in India experienced a decline, marking a five-month low, primarily due to a slower increase in new orders, which consequently subdued production growth. This information comes from a monthly survey released on Tuesday.The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) dropped to 57.5 in September, a decrease from August's 58.6, representing its lowest point in the past five months.
RBI MPC Meeting LIVE Updates: Services sector is maintaining buoyancy, says Das
In September, the services sector in India witnessed its highest growth rate in 13 years, primarily driven by a substantial surge in new business opportunities due to robust demand conditions. Additionally, employment numbers continued to rise as the overall business sentiment improved during the month, as per a monthly survey report released on Thursday. The S&P Global India Services PMI Business Activity Index, adjusted for seasonal factors, climbed from 60.1 in August to 61 in September, indicating a significant increase in output levels.
RBI MPC Meeting LIVE Updates: Expect headline inflation to further ease in Sept, says Das
The overall inflation outlook is clouded by uncertainties by fall in khariff sowing, lower reserve oil levels and volatile global food and energy prices, said Das.
RBI MPC Meeting LIVE Updates: Status quo policy
Yes it is status quo to the extent of rate and stance, but there are many aspects that I am going to spell out that will reveal our approach to monetary policy, said RBI Guv.
RBI MPC Meeting LIVE Updates: Stance - withdrawal of accommodation
MPC also decided by 5-1 vote to remain focussed on withdrawal of accommodation, said Das.
RBI MPC Meeting LIVE Updates: RBI maintains status quo, keeps repo rate unchanged at 6.5%
SDF rate unchanged at 6.25%.
RBI MPC Meeting LIVE Updates: We have identified inflation as a major risk to growth, says Das
RBI MPC Meeting LIVE Updates: India is poised to become the new growth engine, says RBI Guv
RBI MPC Meeting LIVE Updates: The policy we have pursued in recent years has fostered macroeconomic stability, says RBI Guv
RBI MPC Meeting LIVE Updates: RBI Guv begins the MPC speech
RBI MPC Meeting LIVE Updates: Rupee rises 3 paise to 83.22 against US dollar in early trade
Ahead of the RBI's interest rate decision, Indian rupee appreciated by 4 paise to 83.21 against the US dollar in early trade. The selling pressure from foreign equity investors amid strengthening dollar resulted in a negative bias, according to forex traders.
RBI MPC Meeting LIVE Updates: World Bank maintains India's growth projection
In its India Development Update, the World Bank has maintained its growth projection for India in FY24 at 6.3%, even in the face of reduced consumption and a complex global economic landscape.
Speaking in an interview with ET, Auguste Tano Kouame, the India country director for the World Bank, emphasized that the 6.3% growth forecast for India remains notably high compared to other major global economies, affirming India's commendable growth trajectory.
Speaking in an interview with ET, Auguste Tano Kouame, the India country director for the World Bank, emphasized that the 6.3% growth forecast for India remains notably high compared to other major global economies, affirming India's commendable growth trajectory.
RBI MPC Meeting LIVE Updates: 8% growth for 'developed' tag by 2047
To attain its objective of transitioning into a developed economy by 2047, India must sustain a growth rate of 8%. Auguste Tano Kouame, the India country director for the World Bank, emphasized the crucial necessity for increased private investment to bolster this endeavor.
RBI MPC Meeting LIVE Updates: UNCTAD raises India growth estimate
The UN Conference on Trade and Development (UNCTAD) has revised its economic growth projection for India in 2023, increasing it from the previously forecasted 6% in April to 6.6%. However, it anticipates a slight slowdown in India's growth to 6.2% in 2024.
In its recent trade and development report released on Wednesday, UNCTAD also predicts a deceleration in global economic growth, expecting it to reach 2.4% in 2023 but projecting a marginal improvement to 2.5% in 2024.
In its recent trade and development report released on Wednesday, UNCTAD also predicts a deceleration in global economic growth, expecting it to reach 2.4% in 2023 but projecting a marginal improvement to 2.5% in 2024.
RBI MPC Meeting LIVE Updates: Finance Secretary on inflation
India's retail inflation is expected to decrease by December due to more favorable seasonal factors, according to Finance Secretary T V Somanathan in a statement to Reuters. In August, India's retail inflation stayed above the upper limit of the central bank's 2%-6% tolerance range for the second consecutive month, but it did show a decrease from the 15-month high of 7.44% recorded in July.Somanathan expressed optimism, saying, "The inflation rate is beginning to benefit from seasonal factors, making a reduction in inflation by December highly probable."
Meanwhile, Sensex climbs 257.41 points to 65,888.98 points in early trade
Nifty advances 78.25 points to 19,624 points.
RBI MPC Meeting LIVE Updates: External challenges
The upcoming external environment is expected to pose ongoing challenges, as global growth is projected to decelerate in 2024. While the United States might manage to steer clear of a technical recession, there are significant apprehensions regarding China's recovery, while economic prospects in the European Union region continue to appear fragile. In addition, persistent inflation levels exceeding the Central Banks' targets in most developed economies are likely to result in prolonged elevated global interest rates. This situation could potentially have adverse repercussions on the flow of capital into emerging economies, including India.
RBI MPC Meeting LIVE Updates: Monsoon worries
The Eastern and Southern regions of the country are experiencing a deficit in the monsoon, leading to a decrease in the sowing of crops such as pulses and oilseeds by approximately 5% and 2% respectively compared to the previous year. This is a cause for concern, particularly given the already elevated levels of food inflation. Nevertheless, there is some relief in the fact that core inflation in the economy has been showing signs of moderation, dipping below 5% in August. Additionally, the Wholesale Price Index (WPI) inflation, which places less emphasis on food items, has been declining over the past few months.
RBI MPC Meeting LIVE Updates: More inflation woes to come
As the availability of vegetables becomes more favorable, a decline in vegetable prices is being witnessed, which is expected to contribute to the moderation of food inflation in the upcoming months. Nevertheless, a worrisome trend persists in the inflation rates of essential food staples such as cereals, pulses, and milk, which continue to remain elevated.
This could potentially exert pressure on household inflation expectations. The uneven distribution of the monsoon and its adverse effects on kharif crop planting have only exacerbated concerns surrounding food inflation.
This could potentially exert pressure on household inflation expectations. The uneven distribution of the monsoon and its adverse effects on kharif crop planting have only exacerbated concerns surrounding food inflation.
RBI MPC Meeting LIVE Updates: Decoding the recent hike in inflation
The recent surge in CPI inflation can be primarily attributed to a significant increase in food prices, with a particular emphasis on vegetable prices. Adverse weather conditions have led to a sharp rise in vegetable prices, pushing overall food inflation to levels of 9-10% during the months of July and August.
RBI MPC Meeting LIVE Updates: Inflation and manufacturing
In terms of inflation, the S&P Global India Manufacturing Purchasing Managers' Index indicated that supply-chain conditions remained relatively steady, contributing to a significant reduction in input price inflation, which reached its lowest point in over three years.
Nevertheless, higher labor expenses, optimistic business sentiment, and strong demand collectively led to a more pronounced uptick in output charges.
Nevertheless, higher labor expenses, optimistic business sentiment, and strong demand collectively led to a more pronounced uptick in output charges.
RBI MPC Meeting LIVE Updates: India's mfg sector falls to 5-month low
In September, manufacturing operations in India experienced a decline, marking a five-month low, primarily due to a slower increase in new orders, which consequently subdued production growth. This information comes from a monthly survey released on Tuesday.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) dropped to 57.5 in September, a decrease from August's 58.6, representing its lowest point in the past five months.
Despite this decline, the September PMI data still indicated an enhancement in the overall operating conditions, maintaining a positive trend for the 27th consecutive month.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) dropped to 57.5 in September, a decrease from August's 58.6, representing its lowest point in the past five months.
Despite this decline, the September PMI data still indicated an enhancement in the overall operating conditions, maintaining a positive trend for the 27th consecutive month.
RBI MPC Meeting LIVE Updates: RBI may revise inflation projection
Economists anticipate a gradual decline in inflation as the year progresses, although it is expected to stay above the midpoint of the RBI's target. According to Samiran Chakraborty, an economist at Citigroup Inc., he predicts that inflation will decelerate to 5.3% by September, although he acknowledges the persistent risks of inflationary pressure stemming from cereals and pulses.He told Bloomberg that the RBI may slightly revise its full-year inflation projection of 5.4% upwards. Furthermore, the economic growth forecast for the fiscal year ending in March 2024 is likely to remain at 6.5%, with a continued hawkish tone in the policy stance.
RBI MPC Meeting LIVE Updates: Liquidity moves
During its recent meeting in August, the Reserve Bank of India (RBI) took measures to address the excess liquidity stemming from the withdrawal of 2,000 rupee notes from circulation. To achieve this, the RBI raised the mandatory reserve requirements for banks temporarily and also engaged in the sale of government bonds in the secondary markets to absorb any remaining excess funds.
As of October 3, the banking system witnessed a liquidity deficit of 183 billion rupees ($2.2 billion), in stark contrast to the previous surplus of 2 trillion rupees that existed before the RBI's adjustment of the reserve ratio for banks. This shift in liquidity, as reported by Bloomberg Economics, has led to an increase in overnight rates and treasury bill yields, thereby resulting in a tightening of financial conditions.
As of October 3, the banking system witnessed a liquidity deficit of 183 billion rupees ($2.2 billion), in stark contrast to the previous surplus of 2 trillion rupees that existed before the RBI's adjustment of the reserve ratio for banks. This shift in liquidity, as reported by Bloomberg Economics, has led to an increase in overnight rates and treasury bill yields, thereby resulting in a tightening of financial conditions.
RBI MPC Meeting LIVE Updates: Bond flows
Investors are also eager to gain insights into the RBI's approach for managing the anticipated surge in foreign capital inflows, expected to occur after January when India's bonds are incorporated into JPMorgan & Co.'s emerging market bond index.
“A prolonged pause with intermittent liquidity tightness is reflected in the current swap curve,” Churchil Bhatt, an executive vice president for debt investments at Kotak Mahindra Life Insurance Ltd, told Bloomberg. “I don’t think INR swaps are yet pricing in a hike.”
“A prolonged pause with intermittent liquidity tightness is reflected in the current swap curve,” Churchil Bhatt, an executive vice president for debt investments at Kotak Mahindra Life Insurance Ltd, told Bloomberg. “I don’t think INR swaps are yet pricing in a hike.”
RBI MPC Meeting LIVE Updates: A hawkish policy stance
According to a Bloomberg survey involving 38 economists, the RBI's monetary policy committee is anticipated to maintain the current repurchase rate at 6.5% for the fourth consecutive time. Leading economists from institutions such as Citigroup Inc. and Goldman Sachs Group Inc. predict that the RBI will adhere to a hawkish policy stance characterized by the "withdrawal of accommodation." Despite a recent slowdown in inflation due to easing food prices, inflation remains well above the RBI's target range midpoint of 4%. Governor Shaktikanta Das is expected to continue emphasizing a cautious approach to inflation, refraining from indicating any immediate rate cuts, given the Federal Reserve's tightening measures and their impact on currencies like the rupee.
RBI MPC Meeting LIVE Updates: Inside services sector growth
The most recent data on the growth of the services sector indicates a significant increase in new business opportunities for Indian service providers. This growth is the second-fastest observed since June 2010. Alongside the surge in total sales, companies have also reported a notable increase in demand from international clients, particularly from Asia, Europe, and North America.
Pollyanna De Lima, the Economics Associate Director at S&P Global Market Intelligence, commented on the latest PMI results, highlighting the positive news for India's service economy. In September, business activity and new work intake reached levels not seen in over 13 years.
The survey results also show an improvement in confidence regarding the future outlook. Survey participants are optimistic about healthy market dynamics and robust demand in the coming year.
Pollyanna De Lima, the Economics Associate Director at S&P Global Market Intelligence, commented on the latest PMI results, highlighting the positive news for India's service economy. In September, business activity and new work intake reached levels not seen in over 13 years.
The survey results also show an improvement in confidence regarding the future outlook. Survey participants are optimistic about healthy market dynamics and robust demand in the coming year.
RBI MPC Meeting LIVE Updates: Services sector at 13-year high
In September, the services sector in India witnessed its highest growth rate in 13 years, primarily driven by a substantial surge in new business opportunities due to robust demand conditions. Additionally, employment numbers continued to rise as the overall business sentiment improved during the month, as per a monthly survey report released on Thursday. The S&P Global India Services PMI Business Activity Index, adjusted for seasonal factors, climbed from 60.1 in August to 61 in September, indicating a significant increase in output levels.
RBI MPC Meeting LIVE Updates: Rate hike in early 2024
Rating agency Crisil anticipates that the monetary policy committee will keep the policy rate unchanged during the October meeting. According to Crisil's August report titled 'RateView - CRISIL's near-term rate outlook,' there is a potential for a 25 basis point rate reduction in early 2024 under specific conditions.
RBI MPC Meeting LIVE Updates: Focus on withdrawing accommodation
According to a report by SBI Research, it is advisable for the RBI to prioritise a reduction in accommodation measures. This recommendation stems from the observation that it is improbable for inflation to dip below the 5 percent mark throughout the remaining period of the fiscal year 2023-24.
RBI MPC Meeting LIVE Updates: 'RBI will keep the existing key repo rate steady'
As per a report from SBI Research, there is an expectation that the Reserve Bank of India (RBI) will keep the existing key repo rate steady at 6.50 percent. The report, authored by Soumya Kanti Ghosh, who serves as the Group Chief Economic Adviser at SBI Research, indicates that this decision is driven by a prolonged pause in interest rates owing to inflation due to seasonal factors.
RBI MPC Meeting LIVE Updates: A look at inflation
In July, India witnessed a rise in headline inflation, reaching 7.8 percent. However, in the subsequent month of August, it moderated to 6.8 percent. After the August monetary policy meeting, the Reserve Bank of India (RBI) adjusted its forecast for retail inflation in the fiscal year 2023-24, increasing it to 5.4 percent from the previous projection of 5.1 percent made in June.
RBI MPC Meeting LIVE Updates: 'Tightening in liquidity unlikely to sustain'
Karthik Srinivasan, Senior Vice President and Group Head of Financial Sector Ratings at Icra, anticipates that the Monetary Policy Committee (MPC) will likely keep the current policy rate and stance unchanged.
"The significant tightening in liquidity that was seen in the second half of September is unlikely to sustain, particularly with the release of liquidity from incremental CRR imposed in previous policy," he said.
"The significant tightening in liquidity that was seen in the second half of September is unlikely to sustain, particularly with the release of liquidity from incremental CRR imposed in previous policy," he said.
RBI MPC Meeting LIVE Updates: RBI likely to maintain Status quo
Madan Sabnavis, the Chief Economist of Bank of Baroda, has indicated that the Reserve Bank of India (RBI) is likely to maintain the current interest rate framework and policy position. Consequently, it is expected that the repo rate will remain at 6.5 percent, accompanied by a withdrawal of accommodation stance.
RBI MPC Meeting LIVE Updates: The inflation task
The government has entrusted the Reserve Bank with the responsibility of maintaining retail inflation, as measured by the Consumer Price Index (CPI), at a target rate of 4 percent, allowing for a permissible range of 2 percent in either direction. In August, retail inflation stood at 6.83 percent, exceeding the comfort level set by the RBI.
RBI MPC Meeting LIVE Updates: An extraordinary May '22 hike
During an extraordinary meeting held in May 2022, the Monetary Policy Committee (MPC) implemented a 40 basis point increase in the policy rate. Subsequently, in each of the five consecutive meetings held until February 2023, the MPC continued to raise interest rates, albeit with varying magnitudes. This resulted in a cumulative increase of 250 basis points in the repo rate between May 2022 and February 2023.
RBI MPC Meeting LIVE Updates: A gradual upward adjustment
The Reserve Bank initiated a gradual upward adjustment of the policy rate in May 2022, in response to the Russia-Ukraine conflict. This rate reached 6.5 percent by February of the current year.
