RBI may hold rate yet again to focus on inflation management, say experts
RBI may again keep the key interest rate unchanged in April as it is likely to focus more on bringing down inflation to the 4 per cent target after concerns over economic growth abated with GDP growth estimated at nearly 8 per cent, said experts. Also, the Reserve Bank's rate-setting panel — Monetary Policy Committee (MPC) — may take cues from the central banks of some major economies like the US and UK, which are apparently in wait-and-watch mode on interest rate cuts.
Switzerland has become the first major economy to cut interest rates, while Japan, the world's third-largest economy, ended its eight-year period of negative interest rates regime.
The meeting of the Reserve Bank Governor Shaktikanta Das headed MPC is scheduled for April 3-5. The decision will be announced on April 5 (Friday). It will be the first bi-monthly monetary policy of fiscal 2024-25. A total of six MPC meetings are scheduled for the fiscal beginning April 1, 2024.
The Reserve Bank last hiked the repo rate to 6.5 per cent in February 2023 and since then it has held the rate at the same level in its last six bi-monthly policies.
«Given that inflation is still in the 5 per cent range and there is a possibility of future shocks on the food inflation front, the MPC is expected to maintain the status quo on rate and stance this time,» said Madan Sabnavis, Chief Economist, Bank of Baroda.
He further said there can be a revision in the GDP forecast, which will be eagerly awaited.
«The growth in FY24 has been much better than expected, and
