#Easynomics | Fourth Monetary Policy Of 2023-24

Reserve Bank of India (RBI) Governor Shaktikanta Das will unveil the fourth monetary policy of the financial year 2023-24 on Friday, after a two-day review. The review by the six-member Monetary Policy Committee (MPC) will indicate the course RBI will adopt in the remainder of the financial year as it seeks to strike a fine balance between maintaining growth and keeping inflation under control amid high crude oil prices and surging US bond yields. Inflation around the world reached multi-decade highs last year. While headline inflation is coming down steadily, core measures―which exclude food and energy―are proving stickier in many economies and wage growth has picked up. Expectations about future inflation play a key role in driving inflation, as those views influence decisions about consumption and investment which can affect price and wages today. How best to inform people’s views on inflation became an even more crucial consideration as the surge in prices fuelled concern that inflation could become entrenched. According to majority of economists on D-Street, the RBI would keep its key repo rate unchanged at 6.50 per cent at the conclusion of the October 4-6 MPC meeting, with only a few expecting a 25 basis point hike. Analysts also do not expect the central bank to change its stance from ‘withdrawal of accommodation’. However, the recent uptick in global crude oil prices and sustained economic growth are likely to keep the MPC's focus on inflation.