Indians will be looking to see whether the central bank will maintain the status quo on interest rates to push India's growth ambitions, or raise rates in the face of rising inflationary pressure.
The upcoming Monetary Policy meet is scheduled from April 6-8, with a final announcement to be made on the 8th by RBI Governor Shaktikanta Das.
Is there an urgency to protect and fuel growth? Here's what some key economists and stakeholders have to say:
1.Aditi Nayar, Chief Economist at ICRA Limited:
“The MPC is expected to revise up its Consumer Price Index-based inflation forecast, whereas the growth projections for 2022-23 would be pared. The MPC is likely to remain growth supportive for longer than other central banks. Overall, we expect a status quo policy in April 2022."
2.Suman Chowdhury, Chief Analytical Officer at Acuité Ratings & Research:
“RBI has limited scope to tighten monetary policy given the current uncertainties. Going forward, we expect the RBI to restore the width of the LAF corridor to its pre-pandemic levels by hiking the reverse repo rate by 40 bps over Jun-Aug 2022 policy review, followed by a cumulative 50 bps hike in the repo rate in the rest of 2022-23.”
3.Dhruv Agarwala, Group CEO at Housing.com, Makaan.com & PropTiger.com:
“The increase in inflationary pressure due to the war in Ukraine, it will be difficult for the RBI to continue maintaining a status quo on key policy rates in its upcoming monetary policy. While this would hurt the recovery process in India post the disruptions caused by the various waves of the coronavirus pandemic, the RBI may not have the flexibility to avoid a rate hike."
4. Japanese brokerage Nomura:
RBI is likely to re-evaluate its projection for both GDP growth and CPI inflation in the upcoming policy meeting according to a research report. Nomura believes that there is a reasonable likelihood that the RBI will take its first reluctant step towards policy rate normalization in 2022's first Monetary Policy Meet by changing its stance from 'accommodative' to 'neutral'; it is highly likely to balance it with dovish guidance, it said.
What is your view on the upcoming monetary policy?