RBI Governor to Announce Monetary Policy Amid Inflation Concerns

RBI Governor Shaktikanta Das is set to reveal the monetary policy statement on Thursday following a three-day committee meeting. Despite controlled core inflation and falling commodity prices, food inflation remains high. Experts predict repo rates to stay unchanged amid speculation of potential cuts in October if trends improve.

RBI Governor Shaktikanta Das will deliver the much-anticipated monetary policy statement on Thursday at 10:00 am, following the Reserve Bank of India's (RBI) three-day Monetary Policy Committee (MPC) meeting. The post-policy press conference is set to be telecast at 12:00 pm on the same day.

During this pivotal meeting, the RBI is expected to unveil decisions on key policy matters, including the repo rate, which has consistently held at 6.5 percent since February 2023. Experts broadly anticipate that the repo rate will remain unchanged for the ninth consecutive bi-monthly review.

Inflation remains a significant factor influencing the RBI's policy stance. Despite a drop in core inflation and a noticeable 15-20 percent decrease in commodity prices, notably metals, from their 2024 peak, food inflation continues to pose challenges. Experts highlight that India's current inflation still exceeds the RBI's target range, reducing the likelihood of rate cuts until inflation aligns with the 4 percent target. While a rate cut is not expected in this meeting, there is speculation that the RBI may consider cuts in October if inflation trends show improvement.

Governor Das has repeatedly stressed the importance of closely monitoring food inflation, emphasizing a cautious approach to any rate-cut decisions. This prudence is evident in the RBI's recent actions and statements. A recent report by the State Bank of India (SBI) predicts that Consumer Price Inflation will average around 5 percent for the fiscal year 2024-25, except for September and October. This forecast aligns with the RBI's cautious stance, underscoring the urgency of managing inflationary pressures.

As the MPC meeting concludes, all attention will be on Governor Das's policy statement and the subsequent press conference for insights into the RBI's evaluation of the current economic landscape and its future policy direction. Today's decisions will have far-reaching implications for India's economic stability and growth in the forthcoming months.

(With inputs from agencies.)