RBI Begins 3-Day Monetary Policy Meet To Decide On Key Rates

Reserve Bank of India Governor Shaktikanta Das headed six-member Monetary Policy Committee is scheduled to announce the policy resolution on Thursday (February 10)

If the RBI maintains status quo in policy rate on Thursday, it would be the tenth consecutive time since the rate remains unchanged. Image: Getty

Mumbai: The Reserve Bank of India (RBI) on Tuesday began its three-day deliberations to decide the next monetary policy.

The meeting was scheduled to start on Monday but was postponed by a day as Maharashtra government declared public holiday on February 7 to mourn the death of singer Lata Mangeshkar.

RBI Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) is scheduled to announce the policy outcome on Thursday (February 10).

The experts are anticipating that the MPC may maintain the status quo on the benchmark interest rate or repo rate. However, analysts are of the opinion that the MPC may change the policy stance from 'accommodative' to 'neutral' and tinker with the reverse-repo rate as part of the liquidity normalisation process, PTI said in a report.

If the RBI maintains status quo in policy rate on Thursday, it would be the 10th consecutive time since the rate remains unchanged. The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low.

According to Brickwork Ratings, the RBI may continue to hold the policy rates at current levels in the upcoming policy meeting, PTI said. "We expect the MPC to start increasing the policy rates beginning with normalising the policy corridor between repo and reverse repo rate. We expect the RBI to hike the reverse repo rate in its April 2022 policy meeting," it said.

The outlook on inflation and growth may remain unchanged for the current fiscal year, while the statement is keenly awaited for its forward guidance on inflation and the GDP for the next fiscal, it added.

The last MPC held in December 2021 had kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance against the backdrop of concerns over the emergence of the Covid variant, Omicron.

The MPC has been tasked by the government to keep inflation in the range of 2-6 per cent.