The Reserve Bank of India (RBI) kicked off its three-day monetary policy committee (MPC) meeting on Wednesday, diving into discussions about the nation's monetary policy for the upcoming two months. Analysts widely anticipate the MPC to maintain the repo rate at 6.5 percent, continuing this trend for the fifth consecutive bi-monthly cycle.
Comprising three external members and three RBI representatives, including the Governor, the MPC will closely monitor inflation rates and the recent surge in prices for essential commodities like onions and pulses.
Having last adjusted the repo rate to 6.5 percent back in February 2023, the MPC has steadily increased the rate by 250 basis points since 2022. RBI Governor Shaktikanta Das is set to announce the MPC's decision on Friday, December 8, 2023.
The government has mandated the RBI to uphold retail inflation, measured by the Consumer Price Index (CPI), at 4 percent, with a 2 percent margin on both ends.
October witnessed a decline in retail inflation to a four-month low of 4.87 percent, primarily attributed to a drop in food prices. During its October meeting, the MPC projected CPI inflation to reach 5.4 percent for the fiscal year 2023-24, down from 6.7 percent in the previous year, 2022-23.