Once again no change in the policy rate can be seen in the monetary policy review to be presented by the Reserve Bank of India this week. The reason for this could be that with the concerns about economic growth gone and it being around eight percent, the Central Bank may now put more emphasis on bringing the inflation to the target of four percent.
The central bank is following this policy
Experts say that the Monetary Policy Committee (MPC) of RBI, which decides on the policy rate, can look at the stance of central banks of some developed countries like America and Britain. These central banks are clearly adopting a wait and watch approach regarding policy rate cuts.
These changes happened in the world
Switzerland is the first major economy among developed countries to cut the policy rate. At the same time, Japan, the world’s third largest economy, has ended the situation of negative interest rates after eight years. The three-day meeting of the MPC chaired by Reserve Bank Governor Shaktikanta Das will begin on April 3. The monetary policy review will be announced on April 5. This will be the first monetary policy review for the financial year 2024-25. The sixth meeting of the MPC will be held in the financial year starting from April 1, 2024.
The last change was in 2023
RBI last increased the repo rate to 6.5 percent in February 2023. After that, it has been kept unchanged in six consecutive bi-monthly monetary policy reviews. Madan Sabnavis, Chief Economist of Bank of Baroda, said that inflation is still in the range of five percent and there is a possibility of future shock on the food inflation front, in view of this, MPC can maintain status quo on the policy rate and stance this time too. Is.
Revision of GDP estimate
He said that there may be revision in GDP estimates. Everyone will be eagerly watching this. Sabnavis said that economic growth in the financial year 2023-24 has been much better than expected and hence the central bank will have less concerns in this matter and will continue to focus more on bringing inflation in line with the target. The country’s economic growth rate stood at 8.4 percent in the December quarter of the financial year 2023-24. The National Statistics Office has revised the GDP growth estimates for the first and second quarters to 8.2 percent and 8.1 percent respectively from earlier 7.8 percent and 7.6 percent.
