RBI MPC: Central Bank Expected To Maintain Status Quo On Repo Rates, Say Experts

Jyoti Prakash Gadia, Managing Director at Resurgent India, believes that RBI is expected to maintain a status quo with a wait-and-watch approach in the next repo rate review

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) review meeting started on Tuesday for the first time in 2024. Chaired by RBI Governor Shaktikanta Das, the six-member MPC will wrap up its discussions on February 8, 2024. Subsequently, Shaktikanta Das will unveil the MPC's decision on Thursday at 10 am. Amid the ongoing meeting, industry experts shared their expectations from the announcements. Jyoti Prakash Gadia, Managing Director at Resurgent India, believes that RBI is expected to maintain a status quo with a wait-and-watch approach in the next repo rate review. 

“A status quo is expected to be maintained by RBI with a wait-and-watch approach in the next repo rate review. While the core inflation is under check, the food inflation and supply side constants are still posing a challenge for maintaining a watchful eye on inflation.”

“The conventional wisdom of fiscal restraint set out in the interim budget and a cautious approach on the monetary policy front can keep the issue of inflation under control in the coming months to take care of market sentiments in the election period. Any reduction in repo rate is therefore expected to take place only in the later half of the next financial year depending upon the local trends and stance on interest rates at the global level,” Gadia emphasised.

He further highlighted that the burgeoning GST collections indicate a revival, with potential demand-led growth and a view on next year's growth rate projections that may emerge in due course.

“On the liquidity front, the RBI is expected to maintain a balanced, supportive view as the last quarter may see a surge in credit growth with availment of credit facilities to meet the upcoming demand. Overall, the policy meeting is expected to maintain a balanced view with an eye on price control while supporting growth,” Gadia added.

Sathvik Vishwanath, Co-Founder and CEO of Unocoin said, “With the RBI keeping the repo rate at 6.50 per cent and revising its GDP forecast for the current fiscal year upwards, it sets a positive tone for the economy. With inflation under control, RBI's decision signals stability and provides a conducive environment for infrastructure projects.” 

“This is in line with our expectations for continued growth in various sectors, including credit. RBI's proactive approach in managing inflation reflects a balanced strategy that supports economic expansion while maintaining price stability,” added Vishwanath.