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RBI Monetary Policy Committee Meeting: Dates, Time, Streams, and Expert Expectations

 

The Reserve Bank of India’s (RBI) upcoming Monetary Policy Committee (MPC) meeting is scheduled to take place from December 6 to December 8, 2023. RBI Governor Shaktikanta Das will lead the committee discussions and announce the committee’s decision on the morning of December 8.

Determining the policy repo rate, which aims to achieve the targeted inflation rate while considering growth objectives, is the primary responsibility of the MPC.

Composition of the RBI MPC:

The RBI MPC consists of six members, including both external members and RBI officials. Alongside Governor Das, the RBI officials on the committee are Rajiv Ranjan, serving as Executive Director, and Michael Debabrata Patra, serving as the Deputy Governor. The external members are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma.

Key Details of the RBI MPC Meeting:

Meeting Dates: The three-day meeting of the RBI’s rate-setting panel started on Wednesday, December 6, and the outcome will be announced on Friday, December 8.

Timing of MPC Decision: RBI Governor Shaktikanta Das will disclose the MPC decision at approximately 10 am on Friday, December 8.

Meeting Schedule: Following the MPC decision announcement, RBI Governor Das will hold a post-policy press conference at noon on December 8.

Live Streaming of the MPC Meeting: The central bank will live stream the RBI Governor’s policy statement on RBI’s YouTube channel or RBI’s official Twitter handle.

Expert Expectations for the MPC Meeting:

Experts anticipate that the RBI will maintain the short-term interest rate at its current level in the upcoming MPC review, citing India’s inflation being within a comfortable range and the economy’s accelerated growth.

For the past four bi-monthly monetary policies, the RBI has kept the benchmark policy rate (repo) unchanged. The most recent adjustment to the repo rate occurred in February 2023, which increased the rate to 6.5 percent. This adjustment followed a series of interest rate hikes initiated in May 2022 due to the repercussions of the Russia-Ukraine war and subsequent disruptions in the global supply chain, resulting in elevated inflation within the country.

India continues to hold its position as the world’s fastest-growing major economy, with the GDP expanding at a rate of 7.6 percent in the July-September quarter, surpassing expectations. This growth can be attributed to increased government spending and advancements in the manufacturing sector.

Expert Opinions:

Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics at Barclays, believes that with strong growth momentum, declining core inflation, and a more benign global backdrop, the RBI has a wider range of policy options. However, Bajoria expects the bank to remain cautious, taking macroprudential steps to curb lending while closely monitoring supply shocks and potential second-order inflationary effects.

Prasenjit Basu, Chief Economist at ICICI Securities, expects the RBI to keep the policy repo rate unchanged at the next MPC meeting, considering the moderation in both CPI inflation and core CPI inflation. Basu also predicts that the MPC may transition from a stance of “withdrawal of accommodation” to a neutral policy stance.

Parijat Agrawal, Head of Fixed Income at Union Asset Management Company, states that with an improved domestic macro environment and favorable external factors, the RBI is likely to maintain the current rates and stance. Agrawal expects the MPC meeting to address aspects such as systemic liquidity, open market operations, and the retail/unsecured credit environment.

Ranen Banerjee, Partner of Economic Advisory Services at PwC India, highlights the changes in inflation and growth prints since the last MPC meeting. Despite moderate inflation and favorable growth numbers in the second quarter, Banerjee believes the MPC will continue with the “withdrawal of accommodation” stance. However, if there is a strong showing of GDP in the third quarter and core inflation reaches 4 percent, Banerjee does not rule out a rate cut in late Q4 of FY23-24 or early Q1 of FY24-25, considering the upcoming national elections and signals of possible rate cuts from the US Fed.

Shanti Ekambaram, Whole-time Director at Kotak Mahindra Bank, expects the RBI to hold the key interest rates and prioritize inflation, liquidity, and currency management given the healthy macroeconomic indicators and strong economic growth.

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