Shaktikanta Das To Announce Repo Rate Decision At 10 AM Today

India’s Monetary Policy Committee is set to announce its repo rate decision today amid a rapidly changing macro environment globally and locally.

Inflation may has peaked, according to the Reserve Bank of India, and several global economies are staring at an impending recession brought on by tighter monetary policy. Liquidity, while still in surplus, has tightened quicker than expected.

While the turn in environment is notable, it may not be enough for India’s MPC to consider a status quo on repo rate.

Sixteen of 36 economists surveyed by Bloomberg see the MPC raising the repo rate by 50 basis points to 5.40%, a level last seen in August 2019. Fourteen of them predict a 35-basis point hike, five a quarter-point action and one for a 40 basis-point increase – with any of these moves seen enough to return borrowing cost to late 2019 levels. Should the MPC raise rates again, it may move its stance to ’neutral’ from ‘withdrawal of accommodation’, signalling that rates are close to a level where output may be close to potential and inflation close to the target.

While a hike at the current meeting seems like a give, interest rates may peak sooner than earlier expected if inflation peaks and global recession concerns pull down commodity prices.

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RBI Governor Shaktikanta Das’s speech after the MPC meeting begins at 10:00 am in Mumbai today. Track live updates here: