RBI May Again Hold Policy Rate On April 5; Details Here
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The Reserve Bank of India (RBI) is expected to keep the key interest rate unchanged in April as it focuses on bringing down inflation to the 4% target. The Monetary Policy Committee (MPC) will take cues from the central banks of major economies like the US and UK, which are in wait-and-watch mode on interest rate cuts. The meeting of the MPC is scheduled for April 3-5, with the decision to be announced on April 5. The RBI last hiked the repo rate to 6.5% in February 2023 and has held it at the same level in its last six bi-monthly policies. Experts believe that the MPC will maintain the status quo on rate and stance this time due to inflation concerns and the possibility of future shocks on food inflation. The GDP growth for FY24 has been better than expected, and the central bank will continue focusing on targeting inflation. The earliest rate cut is likely in the October 2024 meeting unless there is a negative surprise in growth. The key issues for deliberation in the MPC meeting include strong GDP growth, moderating core inflation, global increase in crude prices, increased logistics costs, and geopolitical conflicts. The government has mandated the RBI to ensure that CPI-based inflation remains at 4% with a margin of 2% on either side. Moody's expects the RBI to keep rates on hold in the coming months due to strong growth and firm inflation.

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