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Apart from the decision on the repo rate hike by the Reserve Bank of India's (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) Monetary Policy Committee (<keyword id="6369693" type="General" weightage="20" keywordseo="mpc" source="Orion">MPC</keyword>) at its upcoming meeting, one can also expect few more things post the discussions. Economic experts expect the <keyword id="15698737" type="General" weightage="20" keywordseo="mpc-to-hike-the-repo-rate" source="Orion">MPC to hike the repo rate</keyword> by 25-35 basis points (bps) with industry lobby body ASSOCHAM also urging the central bank to do the same. Further it will also be interesting to see whether there will be unanimity amongst the members of the MPC on the decisions taken at the ensuing meeting. Post MPC meeting, the RBI Governor Shaktikanta Das is expected to share what the bank has written to the central government as to the reasons for not controlling the inflation and the steps that are being taken to reign in the same. The MPC had met on November 3, to discuss what it would tell the central government on the reasons why it was not able to restrain the inflation. As per the Section 45ZN of the RBI Act, when the central bank fails to meet the inflation target, it shall send a report to the Central government listing: the reasons for failure to achieve the inflation target; remedial actions proposed to be taken by it; and an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions. The proceedings of the said MPC meeting have not been made public even though the law provides to the contrary. As per section 45ZK, the RBI shall publish, after the conclusion of every meeting of MPC, the resolution adopted by the said Committee. Further, as per the Section 45ZL of the RBI Act, the minutes of the MPC meeting has to be published on the 14th day after every meeting including: the resolution adopted at the meeting of the MPC; the vote of each member of the MPC, ascribed to such member, on resolutions adopted in the said meeting; and the statement of each member of the MPC under sub-section (11) of Section 45ZL on the resolutions adopted in the said meeting. On the issue of unanimity amongst the MPC members, at the September MPC meeting, Dr. Ashima Goyal voted against the resolution to hike the repo rate by 50 basis points to 5.90 per cent. Goyal was for a hike of 35 basis points and explaining his reasons voted against the resolution. However, the resolution was passed by a 5:1 majority. In India, the retail inflation rose to 7.41 per cent in September. At the same meeting, another member Prof. Jayanth R. Varma voted against the second part of the resolution on the withdrawal of accommodation to ensure inflation remains within the target. Varma said the MPC should now pause rather than focus on further tightening. On the issue of upward rate revision, he was for upward revision by 60 basis points instead of 50 basis points that was proposed. As the difference between the two was only marginal Varma voted in favour. Be that as it may, the expectation of the MPC meeting is that the repo rate hike will be a moderate one and range between 25-35 bps. The RBI has hiked the repo rate by 190 bps from four per cent to 5.90 per cent. Now MPC will take into account the gross domestic product (GDP) growth estimates, the foodgrain production estimates, inflation projection, global economic activity and other factors. "The RBI will be presenting the monetary policy against the backdro p of GDP growth slowing down as well as inflation being high above six per cent," Madan Sabnavis, Chief Economist, Bank of Baroda said. According to him, 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 th e financial year will be 6.5 per cent, which means there will be one more rate hike in February. It is unlikely to change the stance and the withdrawal of liquidity will continue," he added. "We expect a 35 bps rate hike in the upcoming meeting. The Consumer Price Index (CPI) inflation is likely to moderate further in the coming months and slip below six per cent by the end of the fiscal year," Rajani Sinha, Chief Economist, CARE Ratings told IANS. She also said the Wholesale Price Index (WPI) has also fallen sharply from 16 per cent in May/June to around eight per cent. "The fall in global commodity prices comes as a big relief. However, the concern is that core inflation in India still remains high above six per cent. Food inflation and specifically cereal inflation is also high," Sinha pointed out. This, in turn, will put upward pressure on household inflationary expectations which is already at a high of around 10 per cent. Hence, while there is some reprieve on the inflation front, RBI would remain vigilant, she added. On the growth front, high frequency economic indicators like auto sales, GST collection, e-way bill, PMI continue to indicate healthy recovery. However, some consumption indicators like IIP consumer durables and non-durables remain weak, Sinha said. Moreover, external demand is weakening as the global economy slows down, Sinha said. According to K. Joseph Thomas, Head Research, Emkay Wealth, as far as interest rates go, the trajectory of domestic inflation is of prime importance. "The pressure seems to be easing on the price level, but the comfor t that can be drawn from fuel prices is far from real. The upside risks in fuel prices continue to be a concern," he said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/investment-intent-of-10-5-lakh-crore-received-at-odisha-biz-summit/articleshow/95974094.cms" style="">Investment intent of ₹10.5 lakh crore received at Odisha biz summit</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://businessinsider.in/stock-market/news/indian-markets-open-the-week-on-a-mixed-note-sbi-maruti-suzuki-inox-green-energy-among-stocks-in-focus/articleshow/95991254.cms" style="">Indian markets open the week on a mixed note – SBI, Maruti Suzuki, Inox Green Energy among stocks in focus</a>

RBI's MPC meeting could throw up a lot more than just a rate hike, say experts

Will there be unanimity amongst the members of the Reserve Bank of India's (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>) <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) on the decisions to be taken at their <keyword id="15379699" type="General" weightage="20" keywordseo="November-3-meeting" source="Orion">November 3 meeting</keyword> is the question that pops up. The reason being that at the MPC meeting held in September, one member voted against the resolution hiking the repo rate by 50 basis points to 5.90 per cent. And in the August meeting too there were differences of views on the resolution that was passed. "Even at the upcoming meeting each one will have a view which will be considered by the RBI is what I believe. That will be put in the letter to the Central Government," a senior economist told IANS preferring anonymity. The RBI has scheduled the November 3 meeting of MPC under Section 45ZN of the RBI Act. As per the said Section, when the RBI fails to meet the inflation target, it shall send a report to the Central government listing: (a) the reasons for failure to achieve the inflation target; (b) remedial actions proposed to be taken by it; and (c) an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions. The MPC at its upcoming meeting will discuss what it would tell the Centre as to why it was not able to restrain the inflation. The RBI may also sound out the Central government as to the course of inflation as well as the reasons as to why it may be at the elevated levels. In India, the retail inflation rose to 7.41 per cent in September. At the MPC meeting held in September, Dr. Ashima Goyal voted against the resolution to hike the repo rate by 50 basis points to 5.90 per cent. Goyal was for a hike of 35 basis points and explaining his reasons voted against the resolution. However, the resolution was passed by a 5:1 majority. At the same meeting, another member Prof. Jayanth R. Varma voted against the second part of the resolution on the withdrawal of accommodation to ensure inflation remains within the target. Varma said the MPC should now pause rather than focus on further tightening . On the issue of upward rate revision, he was for upward revision by 60 basis points instead of 50 basis points that was proposed. As the difference between the two was only marginal Varma voted in favour. RBI Governor Shaktikanta Das had said the communication with the central government is a privileged one and it will not be made public by the Bank. However as per Section 45ZL of the RBI Act, the minutes of the MPC meeting has to be published. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/global-smartphone-market-sinks-to-lowest-q3-level-since-2014/articleshow/95163037.cms" style="">Global smartphone market sinks to lowest Q3 level since 2014</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-can-argue-its-case-on-inflation-control-say-experts/articleshow/95158091.cms" style="">RBI can argue its case on inflation control say experts</a>

Will the views of RBI MPC members converge or diverge at Nov 3 meeting?

Mumbai (Maharashtra) [India], April 5 (ANI): <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> Governor Shaktikanta Das will announce the outcome of the first <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) meeting of the financial year 2024-2025 on Friday. The central banking authority of India has kept the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword> unchanged for the last six consecutive MPC meetings and according to experts it is likely to maintain the status quo on interest rates this time too. The repo rate, is the interest rate at which banks draw funds from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> to overcome short-term liquidity mismatches. Monetary Policy Committee was constituted under the Reserve Bank of India Act, 1934. MPC is a six-member committee comprising three members from RBI including Governor Shaktikanta Das and three members appointed by the Central government. The two-day review meeting of the MPC that commenced on April 3 concludes today. The RBI had maintained the status quo on policy rates and stances in its last review, which was held in February 2024. The decision however was not unanimous and one member has recommended a rate cut of 25 basis points and policy change stand to neutral. Since the last policy, rating agencies have revised India's growth forecast upwards. <keyword id="7706673" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="Orion">Finance Minister Nirmala Sitharaman</keyword>, recently said that India will grow over 8 per cent in FY24. Inflation has dropped and has remained under the range of comfort zone. Consumer Price Index inflation was 5.1 per cent in February 2024, up from over 5.5 per cent in December 2023. The core CPI inflation, excluding food and beverages, was at a low of 3.5 per cent in February 2024. However, food inflation at above 7 per cent was a concern, but with a recent cut in the prices of petrol, diesel and LPG, it is likely to further fall in March and may come below 5 per cent. Meanwhile, the India Meteorological Department's (IMD) recent announcement of above-normal temperatures during April-June may be a concern regarding rise in prices of vegetable, fruits and other perishable items. Also prices of rice, pulses have shown an upward trend which may be a concern for the MPC while taking a decision. However, softening prices of non-food items will give some relief to the committee. Generally, normal monsoons follow above normal temperatures, presuming that the average CPI inflation is likely to be in the RBI's comfort zone of 4-6 per cent in FY25. According to official data, retail inflation in India eased a tad in February to 5.09 per cent from 5.10 per cent the prior month, due to the deceleration of prices in all categories except food. Experts believe that the RBI is unlikely to change its policy stance before the August 2024 MPC review and any rate cut is unlikely before that. The US Fed has also recently indicated that it is not in a hurry to cut rates. All these suggest that the RBI, too, is unlikely to go for a rate cut before the October 2024 policy. The next MPC meetings of the RBI have been scheduled this year for June, August, October, December and February 2025.

RBI Monetary Policy Meeting: Central Bank likely to keep rates steady

Mumbai, Apr 20 () The Reserve Bank of India on Monday announced the calendar of the meetings of the Monetary Policy Committee (MPC) for the current financial year, and decision of the first meet will be announced on June 5. The RBI governor-headed committee will meet for five times during the financial year 2020-21. The previous MPC meeting was advanced in view of the COVID-19 outbreak to March 24, 26 and 27 from originally scheduled for March 31, April 1 and 3. The MPC in the previous meeting decided to sharply cut the repo rate by 75 basis points as the coronavirus outbreak led to the lockdown in the country adversely affecting economic activities. The six-member MPC has met for 22 times. The first meeting was held in October 2016. As per the schedule announced by the RBI, the next Monetary Policy Committee meeting will take place during June 3 to 5. The MPC decision is announced on the last day of the meeting. The other meetings will take place on August 4 to 6, 2020; September 29-30 and October 1, 2020; December 2 to 4, 2020; and February 3 to 5, 2021. According to the Reserve Bank of India Act, 1934, the central bank is required to organise at least four meetings of the MPC in a year. NKD CS HRS

Next meeting of rate-setting MPC scheduled for Jun 3-5: RBI

The Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) has started its three-day monetary policy committee (MPC) meeting in Mumbai on Tuesday. The meeting will conclude on Thursday, when the RBI will announce its decisions on the <keyword id="20094323" type="General" weightage="100" keywordseo="repo-rate" source="keywords">repo rate</keyword> and other matters. The repo rate, which has been maintained at 6.5 per cent since it was last increased in February 2023, is widely expected by experts to remain unchanged for the ninth consecutive bi-monthly policy review. Experts highlight that <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> in India remains above the RBI's target range, making it unlikely that the central bank will implement policy cuts until inflation reaches the target of 4 per cent. However, the expert added that the RBI may consider rate cuts in the October meeting. Banking expert Ashutosh Khajuria commented: "Monetary Policy Committee (MPC) may continue to hold the policy signalling Repo rate and wait for <keyword id="19979707" type="General" weightage="20" keywordseo="Consumer-Price-Inflation" source="keywords">Consumer Price Inflation</keyword> 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." The experts also noted that while <keyword id="20196112" type="General" weightage="20" keywordseo="core-inflation" source="keywords">core inflation</keyword> has been contained and commodity prices, particularly metals, have dropped by 15-20 per cent from their 2024 peak, food inflation remains a concern and needs to be closely monitored to ensure stability in overall CPI numbers. The Managing Director of a major bank, who preferred not to be named, told ANI: "During the last policy meeting we could see some voting in favour of a <keyword id="19920203" type="General" weightage="20" keywordseo="rate-cut" source="keywords">rate cut</keyword>. At the same time, we could see The Reserve Bank of India's (RBI) Governor Shaktikanta Das on July 11 said it is too early to talk on the interest rate cut due to the uncertain economic environment and inflation remaining close to five per cent. Considering both, our expectation is that the rate cut cycle may start from the next meeting and no change in <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> this time." RBI Governor Shaktikanta Das had also emphasised in the last policy briefing that food inflation is still a concern and that the regulator is not in a hurry to make a decision on rate cuts. A recent report by the State Bank of India (SBI) also noted that Consumer Price Inflation in India is expected to remain around 5 per cent for the financial year 2024-25, except for the months of September and October.

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RBI's MPC meeting could throw up a lot more than just a rate hike, say experts

IANS

Will the views of RBI MPC members converge or diverge at Nov 3 meeting?

IANS

RBI Monetary Policy Meeting: Central Bank likely to keep rates steady

ANI

Next meeting of rate-setting MPC scheduled for Jun 3-5: RBI

PTI

Repo rate cut unlikely in ongoing MPC meeting, but RBI may change it during October policy review: Experts

ANI

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