RBI MPC to keep repo rate unchanged in April meeting, says CareEdge report

RBI-led MPC will meet on April 5.

The Reserve Bank-led Monetary Policy Committee (MPC) may keep the repo rate unchanged on April 5, said ratings agency CareEdge in a report on April 2. The agency added that with unchanged repo rate, the central bank will also keep the stance unchanged.

“Given that the RBI Governor has been highlighting the aim of getting inflation to 4 percent on a durable basis, the policy rates are likely to be kept on hold in the upcoming policy meeting, with no change in stance,” the ratings agency said.

In its February monetary policy, the central bank kept the repo rate unchanged at 6.50 percent for the sixth consecutive time. The RBI has kept the repo rate unchanged since the April 2023 monetary policy. This was after inflation showed signs of moderating.

Also read: MPC Poll: RBI to leave key interest rates unchanged at April monetary policy, say economists, bankers

Earlier, the MPC had steadily raised the repo rate by 250 basis points (bps) starting from May 2022. One basis point is one-hundredth of a percentage point.

The ratings agency also said that the central bank will look at cutting the key rates in the second half of financial year (FY) 2024-25. “Going ahead, we anticipate that the MPC will contemplate rate cuts in the second half of FY25 as headline inflation approaches the 4 percent threshold. By that time, the RBI will likely have gained further clarity on the risks associated with food inflation and the policy outlook of the US Fed,” the ratings agency said.