The Reserve Bank of India’s monetary policy committee (MPC) is currently deliberating on whether to hold, cut, or revise the repo rates. The decision will be announced on June 8, following the conclusion of its three-day meeting.
During its April meeting, the MPC had kept the benchmark interest rates unchanged at 6.5%, citing a need to push economic growth and easing retail inflation. The RBI has cumulatively hiked the repo rate by 250 basis points since May 2022 in an effort to control inflation.
The MPC is now meeting against the backdrop of retail inflation declining to 4.7%, its lowest level in 18 months. The committee, consisting of six members and headed by RBI Governor Shaktikanta Das, will decide whether to maintain this trajectory or make changes based on a variety of economic indicators.
The MPC meetings are keenly watched by the market because the decisions made during these meetings can significantly impact various sectors of the economy. Businesses and consumers alike watch the MPC meetings closely to understand the direction of monetary policy, as it affects everything from the cost of borrowing to asset prices.
The coming days will be filled with anticipation as market watchers eagerly await the MPC’s decision. Investors will be looking to see whether the committee will prioritize inflation control or spur economic growth and how this decision will impact their investments.
Overall, the MPC meeting serves as a critical checkpoint for the Indian economy, as it decides the direction of monetary policy and influences the sentiment of the market. The expectation is that the committee will make decisions that balance stability and growth, setting the stage for a strong recovery in the coming months.
