Oct 07, 2024 08:35 AM IST
RBI begins a three-day monetary policy meeting today, assessing whether to maintain repo rate at 6.50%. Inflation and global uncertainties will be key factors.
The Reserve Bank of India (RBI) is set to begin its three-day monetary policy meeting today (October 7). The meeting will conclude on October 9 as it is to be seen whether the central bank keeps the repo rate unchanged as it has for the last nine consecutive meetings. The repo rate is currently at 6.50 per cent and has remained steady since the RBI adopted a cautious stance to balance inflation control and growth.
The meeting also comes at a time when the US Federal Reserve announced a steep 50 basis points interest cut in its review meeting after holding interest rates steady for eight straight meetings.
What will RBI MPC look at before making rate cut decision?
The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, is expected to factors look at key like inflationary trends, global economic uncertainties and domestic growth prospects. This comes as inflation continues to be a challenge, particularly in food and fuel prices, which saw a surge earlier this year.
As per the data by Ministry of Statistics & Programme Implementation All India Consumer Price inflation in August was 3.65 per cent, which is under RBI target band but the food inflation stands at 5.65 per cent and remains above RBI’s medium-term target of 4 per cent.
What could make RBI change its stance?
External factors like the rising global crude oil prices on tensions in West Asia may compel the RBI to reconsider its current stance.
What has changed in the RBI?
Three new members have been appointed to the monetary policy committee. The MPC comprises three members from the RBI and three external members appointed by the Central Government.
The new external members included in the MPC are Professor Ram Singh, Director, Delhi School of Economics, University of Delhi, Saugata Bhattacharya, economist; and Dr. Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development.