First RBI Policy After Election 2024 Results: Status Quo By MPC

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is expected to maintain a status quo for the eighth consecutive policy review by keeping both the policy repo rate and stance unchanged. The RBI will announce the policy review on June 7. After increasing the repo rate by 250 basis points (bps) to 6.5% between May 2022 and February 2023, the rate-setting panel has kept the rate unchanged in the previous seven policy review meetings. According to an Informist poll of 30 respondents, the MPC is likely to keep the policy repo rate unchanged at 6.5% for the eighth consecutive meeting. The majority also expects the committee to continue with its 'withdrawal of accommodation' policy stance.All respondents in the poll expect the rate-setting panel to maintain the repo rate due to persistent concerns about the inflation outlook and robust economic growth. India's GDP grew 7.8% in Jan-Mar and 8.2% in 2023-24 (Apr-Mar), much higher than expected. This buoyant GDP growth allows the MPC to focus on inflation, which, while falling to an 11-month low of 4.83% in April, remains above the 4% target. Join BTTV Managing Editor Siddharth Zarabi in conversation with Dr Samiran Chakraborty, MD, Chief Economist, India, Citibank.