RBI MPC: When and where to watch policy announcement by Shaktikanta Das

RBI monetary policy: In December, Das had said that despite consecutive rate hikes, core inflation had continued to remain 'sticky'

RBI
Photo: Bloomberg
BS Web Team New Delhi
3 min read Last Updated : Feb 08 2023 | 8:46 AM IST
The Reserve Bank of India's (RBI) Governor Shaktikanta Das will announce the decision of the Monetary Policy Committee (MPC) on the repo rate today. The six-member rate-setting committee started its bi-monthly meeting to decide on the benchmark interest rate on February 6. According to experts, the central bank of India may go for a lower repo rate hike of 25 basis points (bps). 

"Considering the trend of CPI, the RBI may go in for a smaller increase in repo rate by 25 basis points. However, with the sticky core inflation and persisting rate increase in rates by the US Fed, the RBI may continue with a cautious approach to tame inflation while supporting growth over the long term. The stance may be shifted to neutral while keeping a close watch on liquidity. Next year, higher borrowings by the government will also need to be factored in by RBI while reviewing the repo rate with an eye on the changing interest rate cycle," said Jyoti Prakash Gadia, managing director at merchant bank Resurgent India.

In the December MPC announcement. Das had hiked the repo rate by 35 bps. In 2022 alone, the repo rate was hiked by 225 bps from 4 per cent in January to 6.25 per cent in December. The repo rate has a direct impact on bank deposits as well as the lending rates. These bank rates are directly proportional to the repo rate.

In December, Das had added that despite consecutive rate hikes, the core inflation has continued to be "sticky". 

"While headline inflation may ease through the rest of the year and Q1FY24, it is expected to rule above the target. The medium-term inflation outlook is exposed to heightened uncertainties from geopolitical tensions, financial market volatility and the rising incidence of weather-related disruptions," he had said. 

India's retail inflation in December was at a one-year low of 5.72 per cent. But the core inflation, which does not include food and energy prices, has remained near 6 per cent. 

Earlier this month, the US Fed increased its benchmark rate by 25 basis points. On Tuesday, the job data of the country showed a robust generation of 517,000 new jobs. US Fed chair Jerome Powell said that the job data showed why the battle against inflation will "take quite a bit of time".  

RBI monetary policy: When and Where to watch Shaktikanta Das's address

RBI Governor Shaktikanta Das will announce the MPC's stance on inflation and repo rate at 10 AM on Wednesday. The statement of Das's speech will then be available on the RBI's official website https://www.rbi.org.in/home.aspx.

Also, the live streaming of the address will be available on RBI's YouTube channel.

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Topics :Reserve Bank of IndiaInflationRBI monetary policyRBI Policyrepo rateShaktikanta DasRBI repo ratePolicy repo ratemonetary policy committeemonetary policyCPI Inflationretail inflationcore inflationMPC meetMPCGDPRBI GovernorBS Web Reports

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