RBI begins deliberations on policy rate; decision tomorrow

Mumbai, June 6

The Reserve Bank’s rate-setting monetary policy panel began deliberations on Tuesday amid expectations that the central bank will keep the benchmark interest rates unchanged at 6.5% on the back of easing retail inflation and the need to push economic growth.

Headed by RBI Governor Shaktikanta Das, the six-member Monetary Policy Committee (MPC) will meet for three days and the decision would be announced on Thursday, June 8.

After the last MPC meeting in April, the RBI paused its rate hike cycle and stayed with the 6.5% repo rate. Prior to that, the central bank had cumulatively hiked the repo rate by 250 basis points since May 2022 in a bid to contain inflation.

The MPC is meeting in the backdrop of consumer price-based (CPI) inflation declining to an 18-month low of 4.7% in April. The Reserve Bank Governor recently indicated that the May print would be lower than the April numbers. The CPI for May is scheduled to be announced on June 12.

On expectations from the MPC, Rumki Majumdar, economist, Deloitte India, said: “We expect a pause in this meeting as growth concerns cannot be overlooked. With the global economy slowing down, there are risks that the slowdown contagion may impact us”.

Globally, there are signs that the Central Banks may also take a pause or go with fewer hikes as runaway inflation takes a breather, Majumdar said, and added this will further help the RBI to maintain the status quo.

Dhruv Agarwala, Group CEO, Housing.com said the RBI is expected to keep its benchmark lending rate unchanged, reflecting the easing concerns surrounding inflation. PTI

Experts expect status quo

• The RBI panel is meeting in the backdrop of consumer price-based (CPI) inflation declining to an 18-month low of 4.7% in April
• RBI Governor recently indicated that the May print would be lower than the April numbers
• The CPI for May is scheduled to be announced on June 12