RBI’s monetary policy committee (MPC) will meet for the upcoming bi-monthly policy review to gauze the macroeconomic environment and decide on the monetary policy rate and stance. The decision will be announced on 6th October. CareEdge has published a report titled ‘RBI’s Policy Preview: MPC to Maintain Pause’.
Highlights:
- Even though Q1 GDP growth remained strong, economic headwinds have intensified since then with higher crude oil prices and an erratic monsoon.
- Despite the persistent rise in inflation, primarily driven by the volatility in food prices, there are initial signs of a slowdown in food inflation. Meanwhile, core inflation remains relatively stable, with some easing observed in August.
- Liquidity conditions have tightened and borrowing costs have remained elevated since the last policy.
- The RBI is likely to prioritize supporting economic growth, especially during the festive season, while remaining cautious about inflation.
- We anticipate that the RBI will keep its policy rates unchanged with a unanimous decision while adhering to its stance of ‘withdrawal of accommodation.’
- We do not anticipate any further rate hikes by the RBI in this fiscal year.
