RBI MPC Meeting Begins On Tuesday, Repo Rate Likely To Remain Unchanged

The three-day conference of the Reserve Bank of India’s Monetary Policy Committee began on Tuesday to analyze the state of the economy and discuss interest rates. The RBI MPC, the six-member committee that determines India’s benchmark interest rates, commenced its deliberations on August 6 and will complete its meeting on August 8.

Repo rate announcements directly influence the cost of borrowing for banks and indirectly affect interest rates on loans to businesses and individuals. RBI Governor Shaktikanta Das will announce the committee's decision on interest rates at 10 am on August 8.

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The August gathering is the third since the beginning of the new fiscal year on April 1. The first conference was conducted on April 3-5, the second on June 5-7, and the fourth conference in 2024 follows the February policy conference that took place between February 6-8. The MPC met uninterruptedly for 3 days before declaring its decision at the end of the 3-day duration. The following RBI MPC meeting will take place in October.

Major economists predict that the central bank will continue its ‘accommodation withdrawal’ stance and leave its repo rate unchanged at 6.50 percent after this time as well.

The MPC is in charge of setting the policy repo rate to attain the 4% inflation target while also considering the growth target. The central bank last raised the repo rate to 6.5 percent in February 2023 and has retained it in the next seven bimonthly monetary policy reviews.

At the off-cycle meeting in May 2022, the MPC increased the policy rate by 40 basis points.

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