RBI MPC: Committee To Decide Fiscal Policy And Key Rates In Meeting Starting Dec 4, Check Details Here

RBI MPC: The 3-day meeting will conclude on Friday, December 6, 2024, when the regulator will share its decision on the fiscal policy ahead for the Indian economy

RBI MPC: The Reserve Bank of India (RBI) is scheduled to begin the next monetary policy committee (MPC) meeting on Wednesday, December 4, 2024. The 3-day meeting will conclude on Friday, December 6, 2024, when the regulator will share its decision on the fiscal policy ahead for the Indian economy.

The six-member MPC meeting will be chaired by RBI Governor, Shaktikanta Das, wherein the committee will discuss the key interest rates and growth outlook for the Indian economy. Experts anticipate the committee to maintain the status quo on benchmark interest rates as inflation surpassed its upper tolerance limit recently.

Notably, the RBI has kept the key repo rate unchanged at 6.5 per cent since February 2023. However, the recent disappointing GDP numbers for the second quarter at 5.4 per cent could push the committee to maintain the key rates at the same level, analysts noted. Further, the recent retail inflation level also crossed 6 per cent.

Citing Madan Sabnavis, Chief Economist, Bank of Baroda, a report by PTI said, “Given the rather uncertain global environment and the possible impact on inflation and the fact that currently inflation has been averaging close to 5.9 per cent in the last two months, a status quo on repo rate will be the logical outcome from the policy. There would be a change in RBI projections for both inflation and GDP as inflation has been higher so far than the RBI forecast for Q3 and GDP growth has come much below expectations in Q2. It would hence be of interest to see what the projections this time are.”

 

Notably, while the GDP growth rate of the economy slowed down to an almost two-year low of 5.4 per cent in the July-September period, India managed to remain the fastest growing large economy in the world. This slowdown in growth was attributed to the weak performance of the manufacturing and mining sectors.

Sharing expectations from the regulator, Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA, noted that the ratings agency projects no change in the key rates in the upcoming meeting. However, she added, “We anticipate that the MPC will moderate its growth forecast for FY2025 next week. A February 2025 rate cut may be forthcoming if the next two inflation prints recede.”