RBI Steers Through Economic Crosswinds: Key Policy Decisions Awaited

As the RBI's Monetary Policy Committee meeting concludes, experts anticipate a 'wait and watch' approach amidst global uncertainties. The decision, set for August 6, comes as India faces potential economic challenges from US tariffs but also opportunities to bolster global trade ties.

The Reserve Bank of India (RBI) has commenced its three-day Monetary Policy Committee (MPC) meeting in Mumbai, with a much-anticipated announcement scheduled for August 6 at 10 AM by Governor Sanjay Malhotra.

According to exclusive inputs from top economists speaking with ANI, expectations lean towards the RBI adopting a 'wait and watch' strategy. Dipanwita Mazumdar from Bank of Baroda mentioned, 'A cautious data-dependent move is more judicious given the global economic uncertainty.'

Economists have highlighted concerns, such as the potential downturn in growth due to US tariffs affecting Indian exports, but also see prospects for India to enhance its integration and competitiveness in global supply chains, especially in South-East Asia.

Debopam Chaudhuri, Chief Economist at Piramal Group, forecasts that the RBI will likely maintain rates at 5.5% but anticipates a possible rate cut by 25 basis points in October, suggesting that an accommodative stance might be reconsidered in August.

On the contrary, banking expert Ajay Bagga suggests the RBI has the leeway to cut rates in the forthcoming meeting, bolstered by expectations from the global monetary sphere, including recent decisions by the US Fed and Bank of Japan.

The MPC comprises six members, including the Governor and three external government nominees, meeting bi-monthly to set the monetary policy tone, having previously cut the repo rate by 50 basis points in June.

With inflation under control and systemic projections on target, market watchers eagerly await the August 6 announcement to understand how the RBI will balance domestic and international economic challenges.

(With inputs from agencies.)