RBI MPC LIVE Updates: Will Governor Shaktikanta Das Go for Moderate Rate Hike?

RBI MPC LIVE Updates: Reserve Bank of India Governor Shaktikanta Das will be announcing the bi-monthly monetary policy on Wednesday, December 7

By: Business Desk

News18.com

Last Updated: December 07, 2022, 09:01 IST

New Delhi, India

Shaktikanta Das, inflation, RBI
RBI Governor Shaktikanta Das. (Image: PTI)

RBI MPC LIVE Updates: Reserve Bank of India (RBI) Governor Shaktikanta Das will be announcing the bi-monthly monetary policy on Wednesday, December 7 at 10 am on the conclusion of the three-day of Monetary Policy Committee (MPC) meeting. The Reserve Bank’s rate-setting panel started brainstorming for the next round of monetary policy on December 5. So far in FY23, the MPC has increased the repo rate by 190 bps: 40 bps in May and 50 bps each in June, August, and September. The current policy repo rate is 5.9 per cent. Read More

Dec 07, 2022 08:57 IST

RBI MPC LIVE Updates: What Will be the Key Driver of MPC’s Rate Decision?

Madan Sabnavis, chief economist at Bank of Baroda, called slow economic growth to be the key driver of MPC’s rate decision this time. “The RBI will be presenting the monetary policy against the backdrop of GDP growth slowing down as well as inflation being high above 6%. We do believe that the MPC will continue with rate hikes this time though the magnitude will be lower – probably 25-35 bps. More specifically we do believe that the terminal repo rate for the financial year will be 6.5%, which means there will be one more rate hike in February,” Sabnavis said.

Dec 07, 2022 08:57 IST

RBI MPC LIVE Updates: World Bank Revises India's GDP Forecast

World Bank revised upwards its GDP growth forecast from 6.5% for India to 6.9% for 2022-23, saying the country was showing higher resilience to global shocks.

Dec 07, 2022 08:57 IST

RBI MPC LIVE News Updates: Current Policy Repo Rate Stands at 5.9%

Reserve Bank of India’s Monetary Policy Committee has hiked the interest rate in recent times by 190 basis points (bps) to contain inflation. The current policy repo rate is 5.9 per cent.

Dec 07, 2022 08:56 IST

RBI MPC Meet: A 35bps Rate Increase

The Reserve Bank of India (RBI) is widely seen raising its key lending rate by 35 basis points on Wednesday as inflation continues to stay above its tolerance band but markets will be looking to its outlook on growth and prices for direction, reported Reuters.

Dec 07, 2022 08:56 IST

RBI MPC LIVE Updates: RBI to Hike Rates in Smaller Magnitude in December Policy

State Bank of India in a research report authored by Group Chief Economic Adviser Soumya Kanti Ghosh on Monday said: “We expect the RBI to hike rates in smaller magnitude in December policy attuned to emerging market central banks and the overall rate-setting tone. A 35-bps repo rate hike looks imminent. We believe at 6.25 per cent, it could be the terminal rate for now”.

Also Read: RBI Monetary Policy Committee Meet Live: When, Where & How to Watch Shaktikanta Das Address

The Reserve Bank’s rate-setting panel is likely to go for a moderate interest rate hike of 25-35 basis points as inflation has started showing signs of easing and economic growth tapering.

India’s largest lender State Bank of India in a research report authored by Group Chief Economic Adviser Soumya Kanti Ghosh on Monday said: “We expect the RBI to hike rates in smaller magnitude in December policy attuned to emerging market central banks and the overall rate-setting tone. A 35-bps repo rate hike looks imminent. We believe at 6.25 per cent, it could be the terminal rate for now”.

Consumer price index (CPI) based retail inflation, which the RBI mainly factors in while arriving at its monetary policy, is showing signs of moderation but still remains above the central bank’s upper tolerance level of 6 per cent since January this year.

The inflation dropped to 6.77 per cent in October from 7.41 per cent in the preceding month, mainly due to easing prices in the food basket, though it remained above Reserve Bank’s comfort level for the 10th month in a row.

The GDP growth in the second quarter of the fiscal slowed to 6.3 per cent as against a growth of 13.5 per cent in the preceding three months.

Most economists and analysts expect the rate hikes to continue but with a lesser magnitude than the 50 basis points earlier. Industry body Assocham in its letter to RBI Governor Shaktikanta Das also urged to moderate interest rate hikes in order to ensure that the rising cost of borrowing does not have an adverse and disproportionate impact on nascent economic recovery.

 In its letter, Assocham said the new rate hike should not exceed the 25-35 basis points.

ICRA Chief Economist Aditi Nayar said that with the CPI inflation remaining solidly above the MPC’s 6 per cent tolerance level in October 2022, another rate hike is certain in the December 2022 policy. “However, its size is likely to be tempered to 35 bps, from the 50 bps seen in the last three reviews, given the moderation in CPI inflation in Oct 2022 and the expectations of a further dip in November 2022.”

India Ratings Principal Economist Sunil Sinha said the central bank has front-loaded monetary tightening and the chances of further rate hikes would be more data-dependent. “The frequency and magnitude of rate hikes is expected to decline. We expect a status quo or at best a 25bp rate hike in December 2022 monetary policy.”

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