RBI's Monetary Policy Decision: What to Expect as Economic Growth and Inflation Balance

The Reserve Bank of India's Monetary Policy Committee meeting concludes today, focusing on the policy repo rate amidst subdued inflation and steady growth. Previous easing saw a 125 basis points cut, with expectations of an unchanged rate to prioritize liquidity. Observers await guidance on RBI's economic stance.

The Reserve Bank of India (RBI) is poised to reveal the outcomes of its latest Monetary Policy Committee (MPC) meeting today at 10 AM, following three days of discussions from February 4. The deliberations centered on evaluating economic growth pathways while scrutinizing the policy repo rate.

In the context of modest inflation and steady growth indicators, the policy decision is expected to clarify the central bank's strategic direction. This announcement aligns with the backdrop of substantial monetary easing by the RBI in the past year, marked by a cumulative reduction of 125 basis points in the repo rate since last February, reflecting a balanced effort to bolster growth while managing inflation.

According to Nuvama Research, the RBI is projected to maintain the current repo rate, adopting a neutral stance. The emphasis is likely to shift towards liquidity management over further rate cuts, as the impact of previous reductions continues to affect banking rates. This decision will be pivotal, with markets eagerly monitoring the RBI's forthcoming guidance amid improving economic conditions and moderate inflation.