RBI Monetary Policy Expectations: Repo rate likely to remain unchanged post strong GDP numbers

The RBI Monetary Policy committee is expected to remain status-quo on the repo rate. If left unchanged, this would be the 5th credit policy in a row where the MPC has left the rates unchanged.

The RBI previously halted its rate hike cycle in response to global disruptions causing inflation earlier in 2023. The recent 7.6% GDP growth in the September quarter, attributed to government spending and manufacturing, might prompt cautious moves by the RBI, particularly regarding food inflation. Hence, the RBI's commentary will also be crucial to watch out for. Meanwhile, forecasts also suggest a potential GDP growth adjustment to 6.8% for 2023-24.

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Aligned with government targets, controlling retail inflation remains crucial for the RBI with a clear inflation target of 4%.

October's inflation at a four-month low of 4.87%, primarily due to reduced food prices, aligns with the MPC's projection for 2023-24, indicating a decline from the previous year's 6.7%.