The meeting of the Monitoring Policy Committee of the Reserve Bank of India is going on since Wednesday. After this three-day meeting, it will conclude on Friday. Along with this, a decision will also come on Friday in which information will be given on many issues. After this Monitoring Policy Committee meeting, RBI Governor Shaktikanta Das will tell his decision on the repo rate on Friday, June 7. For information, let us tell you that this is the second meeting of the new financial year, under which the repo rate is currently 6.50%. The repo rate has remained at a high level of 6.5 percent since February 2023.
Let us tell you that this meeting will conclude on Saturday amid strong economic growth and uncertain inflation outlook. It is believed that RBI will maintain its tough stance at the end of this meeting. On the one hand, the NDA government is going to lead the country by coming to power for the third time. In such a situation, everyone will be watching whether the EMI on home loans will be reduced or not.
At the same time, experts have expressed hope that the Reserve Bank will not cut the repo rate as inflation still remains a matter of concern. According to a research paper by SBI, the central bank should stick to its decision to withdraw the liberal stance. The report titled ‘Introduction to the MPC meeting’ expressed hope that the RBI will cut the repo rate in the third quarter of the current financial year and “this cut is likely to be small.”
It also said that the Consumer Price Index based inflation is expected to remain close to five per cent in May and then fall to three per cent in July. Retail inflation data will be released later this month. It said that inflation is expected to remain below five per cent from October to the end of FY 2024-25. Regarding expectations from RBI, Dhruv Agarwala, Group Chief Executive Officer (CEO) of Housing.com and PropTiger.com, said that India’s economy has continued its strong performance and achieved an impressive growth rate of 8.2 per cent in 2023-24, up from seven per cent in 2022-23.
He said, “In view of this, it is expected that the RBI MPC will maintain its current policy stance amid the current inflation pressures and there is little possibility of a cut in interest rates this year.” Anantharam Varayur, co-founder of Mansum Senior Living, also expects the central bank to either keep the interest rate unchanged or cut it in the upcoming bi-monthly policy. He said, “We expect measures that will reduce the shortage of cash in the market and increase consumer confidence, which may have a positive impact on real estate sales.” The government has given the Reserve Bank a target of keeping retail inflation at four percent with a variation of two percent. Saurabh Rai, CEO of Arhas, said that the RBI needs to focus on monetary policy to facilitate financing and promotion of geospatial technology, sustainability solutions. The MPC consists of three external members and three RBI officials. The external members of the rate setting committee are Shashank Bhide, Ashima Goyal and Jayant R Verma.
