 "RBI monetary policy from August 6-8: when and where to watch; more details | Economy & Policy News")
Mumbai: Reserve Bank of India Governor Shaktikanta Das addresses during the 188th AGM of Bombay Chamber Of Commerce & Industry, in Mumbai, Tuesday, June 25, 2024. (Photo: PTI)
What to expect from the RBI monetary policy review?
The MPC is a six-member committee chaired by Das, which has kept the repo rate, or the interest rate, unchanged in the previous eight policy reviews. Repo rates have been at 6.5 per cent since February 2023.
The MPC is expected to meet at least four times a year, deliberating on key policy reviews with the objective of maintaining price stability while considering growth. The body was constituted in 2016.
RBI’s goals
At present, the Centre has set India’s inflation target (gauged by the consumer price index) at 4 per cent (with an upper tolerance limit of 6 per cent and a lower tolerance limit of 2 per cent). In June, India’s retail inflation breached the five per cent mark to stand at a four-month high of 5.08 per cent, and food inflation was 9.36 per cent.
Regarding the June numbers, which were expected to be close to 5 per cent, Das had earlier said in a television interview that “it is too premature to talk about interest rate cuts.”
For context, this inflation target, set by the Centre in 2016, was slightly higher at 4.76 per cent in 2019-20 and has been off track since then. It even breached the “comfort zone” of 6 per cent in the Covid-19 years of 2020-21 and 2022-23.
The central bank forecasts that the average retail inflation will decrease from 5.4 per cent in FY24 to 4.5 per cent in 2024-25.
The RBI’s second goal is to promote growth, which the central bank expects to show a strong outlook.
India’s real GDP growth for FY24 stood at 8.2 per cent, surpassing that of all major economies. For the ongoing FY25, the RBI has revised its growth forecast upward to 7.2 per cent, up from the previously projected 7 per cent.
In the last MPC meeting in May, two members had voted in favour of rate cuts, arguing that keeping the interest rates “too high for too long” could weigh on growth given the rise in the cost of capital.
When and where to watch the RBI MPC policy review?
Stay tuned with Business Standard for extensive real-time updates and in-depth analysis of the policy review.
The latest monetary policy statement will be broadcast live on August 8. Additionally, the RBI Governor will hold a press conference at 12 pm.
First Published: Aug 05 2024 | 9:54 AM IST
