RBI may maintain repo rate at 6.5 percent, decisions will be announced on December 8

RBI may maintain the status quo on the repo rate in its bi-monthly monetary policy review this week. Experts have made this estimate on the basis that inflation is under control and the pace of economic growth is satisfactory. The central bank has kept the policy repo rate unchanged in its last four bi-monthly reviews. RBI last increased the repo rate to 6.5 percent in February.

The meeting of the Monetary Policy Committee (MPC) chaired by RBI Governor Shaktikanta Das will begin on December 6. In the context of monetary policy, the interest rate decision of the supreme policy regulator MPC will be announced on November 8.

The MPC has three external and three internal members. The external members are Shashank Bhide, Ashima Goyal, and Jayant R Verma while the internal members include Governor Shaktikanta Das, Executive Director Rajiv Ranjan, and Deputy Governor Michael Debabrata Patra.

Due to rising inflation due to the Russia-Ukraine war and disruptions in the global supply chain, the phase of increase in repo rates started in May 2022 and continued till February 2023. However, the repo rate has remained stable since the bi-monthly monetary review in April 2023.

Madan Sabnavis, Chief Economist of Bank of Baroda, said that this time the central bank can maintain its old stance on its monetary stance along with policy interest rates. The growth rate of 7.6 percent during the September quarter gives confidence that the economy is on track.

Low inflation figures in the last few months also give scope that there is no need to increase rates. Aarodeep Nandi, economist (India) at Nomura also expects the MPC to take a unanimous decision not to raise rates in its upcoming meeting. Dhanuka Group Chairman RG Aggarwal also expressed similar hope and said that Indian agriculture should embrace technological progress and for this, affordable financing is necessary.