RBI monetary policy: here's what experts predict

The Reserve Bank of India (RBI) is expected to raise interest rates by 25 basis points, in line with recent increases by other major central banks as long as inflation stays high, according to the majority of D-Street analysts and experts. They also anticipate that the most recent increase, if it occurs, will be the final one in the cycle.

The Monetary Policy Committee (MPC) of the Reserve Bank is meeting for three days on April 3, 5 and 6 and will announce the policy on Thursday.

Analysts maintained that the policy tone will likely be balanced with the move to a neutral stance.

MPC will take into account various domestic and global factors before coming out with the first bi-monthly monetary policy for fiscal 2023-24.

Along with elevated retail inflation in India, the other factor of consideration is the recent rate hike actions and hawkish stance taken be central banks of other countries including the U.S Fed and European Central bank.

The Reserve Bank on India (RBI) has been raising benchmark rates since May 2022 to contain inflation which has been largely driven by external factors, especially the disruption of the global supply chain following the outbreak of the Russia-Ukraine war.

In its last policy meeting held in February, RBI had raised the policy rate or repo by 25 basis points to 6.50 per cent.

Retail inflation was 6.52 per cent in January and 6.44 per cent in February.