RBI Policy: Six factors that the monetary policy committee will consider while making a decision
RBI) may maintain a status quo on policy rates and monetary stance on Thursday but the six-member committee has at least six major factors to consider before they reveal the country's short-term monetary policy. Experts believe the RBI will maintain a status quo on rates and stance on August 10.
And this pause could be prolonged because the chances of rate cuts this year look feeble due to the recent sharp rise in vegetable prices and the US Fed rate hikes. A rate hike in the near term also is not on the cards as the central bank may want to wait for the next few months to observe the evolving trend of inflation before going for rate hikes.
Read more: RBI MPC may maintain the status quo on August 10; comment on inflation, growth trajectory to be in focus Let's take a look at the six crucial factors that the monetary policy committee may consider while making a decision on policy rates and stance: There has been a sharp uptick in the prices of vegetables and pulses in the last few weeks which has raised the risk of food inflation. Morgan Stanley expects India's retail inflation to leap to 6.2 per cent at the end of the quarter ended September, against its previous forecast of 5.5 per cent, due to higher food inflation.
The Consumer Price Index (CPI) based inflation is, however, expected to moderate to a 5-6 per cent range during the second half of FY24. Shreyansh Shah, a research analyst at StoxBox believes that the recent surge in vegetable prices is transient and would be interesting to see whether the central bank resorts to any upward revision to its consumer price inflation forecast.
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