Key Points
The RBI may again keep the key interest rate unchanged in April as it is likely to focus more on bringing down inflation to the 4 per cent target after concerns over economic growth abated with GDP growth estimated at nearly 8 per cent, said experts..
Aditi Nayar, Chief Economist, Icra, said the upward revision in the NSO's GDP growth estimates for the first and second quarters of fiscal 2023-24, three successive quarters of 8 per cent plus GDP expansion and the CPI print of 5.1 per cent for February 2024, suggest status quo on rates and stance in the upcoming April meeting...
"Icra believes that the policy stance is unlikely to be changed before the August 2024 MPC review until there is visibility on the monsoon turnout as well as on the sustenance of the growth momentum and the US Fed's rate decisions," she said.. Consequently, the earliest rate cut is only likely in the October 2024 meeting unless growth posits a negative surprise in the intervening quarters, amid a shallow rate cut cycle limited to 50 bps at best, Nayar added...
On expectations from the MPC, Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, opined that the overall strong GDP growth in the third quarter, moderating core inflation going below 3.5 per cent, global increase in crude prices, increased logistics costs and the escalating situation in geopolitical conflicts would be the key issues for deliberation...
On March 25, RBI deputy governor Michael Debabrata Patra, in a keynote address at Nomura's 40th Central Bankers Seminar in Kyoto (Japan), said inflation in India is moderating after surging on multiple and overlapping supply shocks from the pandemic, weather-induced food price spikes, supply chain disruptions and global commodity price pressures following the Russia-Ukraine conflict...
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