RBI MPC Meet 2024 Expectations: Will central bank change repo rate?

RBI MPC Meet 2024 Expectations Live: Suman Bannerjee, Hedonova CIO, said, “Amid persistent inflationary pressures, particularly due to rising food prices, the Reserve Bank of India (RBI) is expected to maintain the current benchmark rate. This cautious approach is designed to balance economic growth with price stability. By holding the rate steady, the RBI aims to mitigate inflation without stifling economic momentum. Rising food prices have been a significant contributor to inflation, prompting the central bank to adopt a wait-and-watch strategy. This decision underscores the RBI’s commitment to ensuring long-term price stability while fostering a conducive environment for sustainable economic growth.”

RBI MPC Meet 2024 Expectations Live: Banking expert Ashutosh Khajuria said, “Monetary Policy Committee (MPC) may continue to hold the policy signalling Repo rate and wait for Consumer Price Inflation to decisively fall below 4 per cent, the target rate. For the present, the continuation of the current stance is widely expected. MPC in India may change the stance and rate action by the beginning of the second half of the year in their October meeting at the earliest.”

RBI MPC Meet 2024 Expectations Live: Icra’s Chief Economist and Head of Research and Outreach, Aditi Nayar, said that a stance change is possible in October 2024. She said, “This could be followed by a 25 bps rate cut each in December 2024 and February 2025, with an extended pause thereafter.”

RBI MPC Meet 2024 Expectations Live: Bank of Baroda’s Economist Aditi Gupta said that the RBI is likely to monitor incoming data and continue to exercise caution before deciding on cutting rates. She said, “We believe that the nearest possibility of a rate cut is December 2024.”

RBI MPC Meet 2024 Expectations Live: Achala Jethmalani, Economist, RBL Bank, said, “In a 4:2 dissenting vote we see the MPC maintain a status quo on policy rates and stance at the August policy. We think the policy pivot to change in stance could precede a rate cut action. We see the policy pivot to come through once there is some more clarity and confidence on food inflation trajectory edging lower. With food inflation running hot at almost 9% we see it obstruct the pace of disinflation as well as policy cuts in CY24.”

RBI MPC Meet 2024 Expectations Live: Goldman Sachs said, “Going forward, even though a high base last year is going to pull headline inflation down towards 4 per cent in Q3, there are upside risks to food inflation due to an uneven monsoon.”

RBI MPC Meet 2024 Expectations Live: RBI has been raising concerns over elevated food inflation over the past many months. Headline inflation edged up to 5.1 per cent in June 2024 from 4.8 per cent in May. The increase in inflation is attributed to food inflation which firmed up to 8.4 per cent in Jun.

RBI MPC Meet 2024 Expectations Live: In the June policy, two external members – Ashima Goyal and Jayanth R Varma – voted for a 25 basis points (bps) reduction in the repo rate.

RBI MPC Meet 2024 Expectations Live: Parijat Agrawal, Head – Fixed Income at Union Mutual Fund, said, “The inflationary pressures have cooled off and monsoon worries have subsided. The fiscal consolidation seems to have given the required comfort as it follows the glide path. We expect the policy to have a dovish tilt taking cognizance of the recent weakness in global economy and volatility in financial markets. We expect the policy rates to remain unchanged; Monetary Policy Committee may change the stance to neutral.”

RBI MPC Meet 2024 Expectations Live: RBI is likely to maintain status-quo for the ninth consecutive policies. Goldman Sachs said in a report, “We expect the RBI MPC to keep the policy repo rate unchanged at the August 8 meeting at 6.50 per cent, with a 4:2 vote in favor, retain the monetary policy stance of ‘withdrawal of accommodation’, sound relatively optimistic on growth, and continue to reiterate the commitment to the 4 per cent headline inflation target.”

RBI MPC Meet 2024 Expectations Live: The Reserve Bank of India (RBI) started its three-day monetary policy committee (MPC) meeting in Mumbai on August 6.