 "RBI MPC meet begins: First meet post interim budget 2024; 5 things to know")
The Reserve Bank of India (RBI) began its three-day Monetary Policy Committee (MPC) meeting on Tuesday, where it is expected to hold the repo rate or interest rates steady for the sixth consecutive policy review.
The repo rate is the interest rate at which the central bank gives loans to the banks in India.
When will RBI announce its decision?
The RBI MPC meeting will conclude on February 8, following which the RBI Governor Shaktikanta Das will announce the decision.
What to look out for in RBI MPC meet outcome?
1)According to experts, given that global dynamics have not shifted a lot since the last meeting held in December, the RBI does not have a reason to tighten the repo rate at present.
2)Ahead of the RBI's decision, a State Bank of India research report suggested that the first rate cut could be on the table from June this year. "August 2024 looks the best bet now," it said.
3)The RBI MPC's discussion is also likely to be influenced by the decisions of the global central banks. Notably, the US Federal Reserve also kept its rate unchanged for the fourth time at 5.25 per cent to 5.5 per cent last week.
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4)In the last meeting, the RBI also kept its policy stance unchanged at "withdrawal of accommodation." Whether the same will happen this time as well or it will shift its stance to "neutral" is to be watched out for.
5)The meeting's outcome on liquidity tightness is also a key component. The banking system's liquidity deficit hit a record high in January, widening to Rs 3.34 trillion as on January 23, according to the RBI data. The central bank has been stepping up efforts to manage liquidity, which is expected to continue, the experts said.
(With inputs from agencies)