The three-day bi-monthly monetary policy committee (MPC) meeting of the RBI started on Wednesday with financial market participants set to closely monitor the outcome and the policy stance of the central bank.RBI typically conducts six bi-monthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.According to SBI Research, the Indian central bank is expected to yet again pause the key repo rate this week.“Domestically, we believe at 6.50 per cent, we are in for a prolonged pause as seasonality of inflation is tapering first…,” SBI Research report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, said recently.“We believe the (RBIs) stance should continue to be withdrawal of accommodation as inflation is unlikely to tread below 5 per cent in rest of 2023-24,” the SBI Research report said.RBI in its past three meetings – April, June, and August, held the repo rate unchanged at 6.5 per cent. The repo rate is the rate of interest at which RBI lends to other banks.Rating agency Crisil too believed the monetary policy committee would again hold the policy rate in the October meeting. A 25 basis point rate cut in early 2024 is a conditional possibility for now, it asserted in an August report titled RateView – CRISILs outlook on near-term rates.Informerics Ratings is also of the view that the RBI will keep repo rate unchanged for the fourth successive time.With sticky retail inflation – breaching the MPCs upper threshold of 6 per cent and the US Feds persisting hawkish stance, the RBI is likely to keep the repo rate unchanged for the fourth time.A relative decline in inflation, barring the latest spike, and its potential for further decline may have prompted the central bank to put the brake on the key interest rate. Inflation has been a concern for many countries, including advanced economies, but India has managed to steer its inflation trajectory quite well.Barring the latest third straight pause, the RBI raised the repo rate by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.The outcome of the central banks meeting will be announced on Friday morning.(With inputs from ANI)
