The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting for April 2024 commences today, with significant implications for India’s monetary policy landscape. Scheduled from April 3rd to 5th, 2024, the meeting will culminate in the announcement of outcomes on April 5th at approximately 10 AM by RBI Governor Shaktikanta Das.
This pivotal meeting marks the inauguration of the financial year’s first bi-monthly review, during which crucial decisions regarding interest rates, particularly the repo rate, are deliberated upon.
It is widely anticipated that the committee will opt to maintain the repo rate at its current level of 6.5%, primarily due to prevailing concerns regarding inflation. However, the final decision will be unveiled on April 5th.
MPC meetings, an integral part of India’s economic calendar, occur at regular intervals throughout the year. Following the April meeting, subsequent gatherings are slated for June, August, October, December, and February. These meetings serve as crucial forums wherein the committee evaluates an array of economic indicators to formulate and adjust the nation’s monetary policy.
During February’s meeting, the MPC opted to sustain the repo rate at 6.5%, marking the sixth consecutive instance of such a decision. The repo rate, pivotal in determining borrowing and loan rates, underscores the RBI’s lending rate to other banks.
Despite recent positive economic indicators, prevailing concerns surrounding inflation may deter a rate cut in the current economic climate. In February, inflation stood at 5.09%, marginally exceeding the ideal scenario of 4% but remaining within the RBI’s comfort zone of two-six percent.
Analysts foresee a potential initiation of a rate cut cycle by the RBI in the third quarter of the financial year 2024-25, aligning with the central bank’s steadfast commitment to attaining sustainable inflation levels. Notable institutions such as S&P Global Ratings and Morgan Stanley anticipate forthcoming rate cuts, with predictions ranging from 75 basis points to commencement from June 2024 onwards.
Stay tuned for further updates on the outcomes of the April 2024 MPC meeting, as it unfolds and shapes the trajectory of India’s monetary policy landscape.
SOURCE:INTERNET