RBI MPC Meet LIVE: Reserve Bank of India to unveil monetary policy of new financial year today, expected to maintain status quo on rates – The Economic Times
The RBI is likely to suggest that inflationary pressures are temporary, that inflation will remain below its 6 per cent upper-bound, and that monetary policy should remain supportive of growth.
The government has mandated the central bank to keep the inflation at 4 per cent (+,- 2 per cent). After the February MPC meeting, the RBI had decided to hold its key lending rates steady at record low levels for the 10th straight meeting to support a durable recovery of the economy from the COVID-19 pandemic.
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RBI is likely to re-evaluate its projection for both GDP growth and CPI inflation in the upcoming policy meeting
Japanese brokerage Nomura in a research report said the RBI is likely to re-evaluate its projection for both GDP growth and CPI inflation in the upcoming policy meeting.However, the RBI is likely to suggest that inflationary pressures are temporary, that inflation will remain below its 6 per cent upper-bound, and that monetary policy should remain supportive of growth.
“Difficult for the RBI to continue maintaining a status quo”
“While this would hurt the recovery process in India post the disruptions caused by the various waves of the coronavirus pandemic, the RBI may not have the flexibility to avoid a rate hike,” he said.
Limited scope to tighten monetary policy: Acuité Ratings & Research
Amidst the deleterious impact of the war, the RBI will be walking a tightrope on its monetary policy decisions, striving to control inflation within the tolerance band while at the same time supporting nascent growth impulses, he said.
“Going forward, we expect the RBI to restore the width of the LAF corridor to its pre-pandemic levels by hiking the reverse repo rate by 40 bps over Jun-Aug 2022 policy review, followed by a cumulative 50 bps hike in the repo rate in the rest of 2022-23,” Chowdhury said.
MPC is unlikely to sacrifice growth to control imported inflation: ICRA
“Nevertheless, the MPC is unlikely to sacrifice growth to control imported inflation. With the upper threshold of the medium-term inflation target range being as high as 6 per cent, the MPC is likely to remain growth supportive for longer than other central banks. Overall, we expect a status quo policy in April 2022,” she said.
RBI may change stance
Though RBI is expected to maintain policy rates as it is to support growth, but it may change stance in view of retail inflation piercing its upper tolerance limit, global uncertainties created by the ongoing Russia-Ukraine war, and the urgency to protect and boost growth, feel experts.
RBI to announce policy for this year today
The Reserve Bank of India’s Governor Shaktikanta Das is set to announce the monetary policy rates for new financial year (2022-23) today. Most analysts are expecting RBI to maintain status quo on interest rates to support growth.
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