RBI MPC Meeting Highlights: BIG SURPRISE! MPC decides unanimously to keep repo rate unchanged; Shaktikanta Das says war against inflation continues

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A pleasant surprise: SBI Chairman Dinesh Khara on latest RBI policy action

Describing the RBI's decision to pause the rates for now as "a pleasant surprise, given the market talks of one more final rate hike," SBI Chairman Dinesh Khara says: "With uncertainty looming large, this decision was perfectly timed."

"Simultaneously, the bouquet of regulatory initiatives like linking UPI to credit and developing the onshore market will spur innovations in product offerings. The decision to enable tracing unclaimed deposits and strengthening of grievance redressal are customer-centric. Overall, the RBI’s April policy guides the market in terms of expectations alignment," he adds. 

RBI MPC Resolution April 2023 | Repo rate pause a welcome decision, may put to rest anxiety among borrowers, says LIC Housing Finance CEO 

LIC Housing Finance CEO Y Viswanatha Gowd points out that today's move sends a positive signal to borrowers and will likely improve the sentiment. 

"We expect the real estate along with other sectors to build up on this as it has come at the beginning of the new financial year.  The prospective homebuyers will now be encouraged to crystallise their buying decision," he says. 

RBI April 2023 Policy Review | WATCH Shaktikanta Das announce a pause in repo rate after six back-to-back increases since May 2022 

RBI Policy | All members voted unanimously to keep repo rate at existing level

All members of the MPC voted in favour of the status quo, announced earlier in the day:

• Shashanka Bhide
• Ashima Goyal
• Jayanth R Varma
• Rajiv Ranjan
• Michael Debabrata Patra
• Shaktikanta Das 

However, the MPC dissented on the decision to maintain the "withdrawal of accommodation" stance — a switch it made from "accommodative" in May 2022: 

Minutes of the April 3-6 meeting, due for release on April 20, 2023, will reveal what really made Jayanth R Varma express reservations on this resolution. 

RBI Policy LIVE | Domestic economic activity remained resilient in January-March 2023 

The RBI expects the production of food grain in the rabi season to increase 6.2 per cent in 2022-23. 

Here are some other key things pointed out by the RBI: 

• Among services, air passenger traffic, port freight traffic, e-way GST bills, toll collections saw healthy growth in Q4
• Railway freight traffic registered modest growth
• PMI pointed towards sustained expansion in manufacturing as well as services in March

RBI LIVE | Central bank says global economic activity remains resilient despite sticky inflation, acknowledges turmoil in banking system in some advanced economies

Here are some highlights:

• RBI also mentions tight financial conditions in global economy, lingering geopolitical hostilities
• Sovereign bond yields fell steeply in March on safe-haven demand, reversing sharp increase in February 
• Equity markets have declined since last MPC meeting, US dollar has pared its gains
• Weakening external demand, spillovers from the banking crisis in some advanced economies, volatile capital flows, debt distress in certain vulnerable economies weigh on growth prospects

'Enough might just be enough' overarching message from RBI: Nomura India Economist Aurodeep Nandi 

“Enough (tightening) might just be enough was the overarching message from the RBI in the April meeting," says Aurodeep Nandi, India Economist and Vice President, Nomura. 

"We were out of consensus in forecasting that the RBI would pause and keep stance at ‘withdrawal of accommodation’ – which is exactly what was delivered. In our view, this reflects a forward looking monetary policy that takes into cognizance elevated global growth risks, under-control inflation trajectory, and the need to wait and watch and assess the impact of the sharp policy tightening already delivered," he says.

"However, the RBI has kept the door open to further action if macro conditions change, also in line with our expectations. We maintain our view of a policy pause hereon and 75bp of rate cuts, starting from October," he adds. 

RBI Policy LIVE | Consumer inflation estimated at 5.2% in 2023-24

The RBI pegs retail inflation — gauged by the consumer price index — at 5.1 per cent in the quarter ending June 2023, 5.4 per cent each in the next two quarters, and 5.2 per cent in the January-March 2024 period. 

The RBI cites evenly balanced risks, once again, giving the rationale behind its projections, assuming the average crude oil price at $85 a barrel and a normal monsoon. 

RBI LIVE | MPC pegs GDP growth at 6.5% in 2023-24

Here's a look at its latest projections: 

• July-September 2023: 6.2 per cent
• October-December 2023: 6.1 per cent
• January-March 2024: 5.9 per cent

In its February 2023 review, the RBI had projected GDP growth at 7.8 per cent in the quarter ending June 2023. 

RBI Policy LIVE | Financial stability concerns appear to have pre-empted the pause in repo rate, says Aditi Nayar

The MPC assesses the impact of its cumulative increases of 250 bps in the repo rate in the current cycle, says Aditi Nayar, Chief Economist, Head-Research and Outreach at ICRA.

"If inflation does not fall in line with the MPC's assessment for Q1 FY2024, another hike could be in the offing, especially if the financial stability situation stabilises," she says. 

RBI LIVE | Shaktikanta Das signals that more hikes not ruled out 

RBI Governor Shaktikanta Das's announcement of no change in the ley interest rate for now sends the stock market leaping strongly to the green. However, the RBI chief also says that today's pause should be considered the outcome of the April review only, hinting that the central bank may be open to considering more increases going forward. 

RBI LIVE | Shaktikanta Das says core inflation remains at elevated levels

"Our job is not over... The war against inflation has to continue until we see a durable decline in inflation closer to the target," the RBI Governor says. 

He reiterates the central bank's commitment to taming inflation to bringing it within two per cent of its medium target of four per cent. 

RBI LIVE | Shaktikanta Das says core inflation remains at elevated levels

"Our job is not over... The war against inflation has to continue until we see a durable decline in inflation closer to the target," the RBI Governor says. 

He reiterates the central bank's commitment to taming inflation to bringing it within two per cent of its medium target of four per cent. 

RBI LIVE | Shaktikanta Das says consumer inflation estimated to ease in 2023-24 

The RBI estimates GDP growth to be at 6.5 per cent in the year ending March 2024, the RBI governor says. 

RBI LIVE | Shaktikanta Das says central bank estimates GDP growth to be at 7.8% in April-June 2023

RBI MPC LIVE | REPO RATE UNCHANGED AT 6.5%

Catch latest stock market updates here 

RBI Governor Shaktikanta Das to reveal what's in store for economy in less than 15 minutes 

RBI MPC Meeting April 2023 LIVE | Sensex, Nifty edge lower ahead of Shaktikanta Das's press conference at 10 am; rate-sensitive stocks a mixed bag   

Both headline indices drop as much as 0.3 per cent within the first few minutes of trade, as the Indian share market awaits the outcome of the RBI MPC's first policy review of the financial year that began earlier this month. The Sensex declines 165.2 points to 59,524.3 at the weakest level of the day so far, and the Nifty50 slips to as low as 17,511.6, down 45.5 points from its previous close.  

Catch latest stock market updates here

RBI named Neeraj Nigam executive director this week

The Reserve Bank of India (RBI) has appointed Neeraj Nigam as executive director (ED). He will be in charge of four departments, handling areas such as consumer education and protection. Before being promoted to this post, Nigam headed the RBI's Bhopal regional office as director. He has also served as the RBI General Manager in the past.

Nigam has been serving the RBI over a span of more than three decades and has headed various departments like Regulation and Supervision, human resource management, premises, currency management, bank accounts, and other areas in the Reserve Bank, in its central office as well as regional offices. Read more

Post-COVID Rate Hikes | Here's how RBI's US counterpart has moved the key rates 

Here's how the Fed — the US central bank — has moved the key rates in the post-pandemic era: 

Could RBI change its stance today? What economists say

Bank of Baroda Chief EconomistMadan Sabnavis expects a hike of 25 bps in the repo rate along with a change in stance to 'neutral' today.

He believes today's rate hike decision won’t be unanimous and will likely be followed by a pause in the next review.

Read about what other economists think

How financial, other rate-sensitive stocks have fared since last RBI MPC review

The Nifty PSU Bank index has underperformed the Nifty Bank and Nifty50 since the February policy review, tumbling around four per cent. 

Among heavyweights, financial stocks such as the Bajaj twins – Bajaj Finance and Bajaj Finserv – have cracked by about 6-9 per cent and SBI about five per cent. 

Read more on how Indian share market has reacted to RBI's last rate hike

Do you now where key RBI rates stand? Here's your quick guide to some of the key rates and ratios, and where they are at present  

Economists expect the RBI's MPC to go for a hike of 25 basis points in the repo rate today. This is the rate that pretty much determines the interest rate that you have to bear for loan repayment.  

Here's how the RBI has moved the repo rate in the post-pandemic era: 

Read more on RBI repo rate, other key rates you need to know

Expect RBI to hike repo rate by 25 bps as inflation remains a lingering problem: Knight Frank India's Shishir Baijal  

The course of rate hike is more likely to be aligned with the stance taken by key central banks such as the Fed, according to Shishir Baijal, Chairman and Managing Director, Knight Frank India

"With the recent crude oil production cut by the OPEC and Russia, consumer inflation is unlikely to ebb anytime soon. Consumer inflation in the core categories (ex-food and fuel) as well has stayed persistently high above six per cent for the last 22 months," he says. 

"We remain cautious of the impact of prolonged rate hikes on the housing sector as well as overall consumer demand in the economy."

RBI MPC Meeting 2023 | After April 6, how many hikes can you expect before the RBI hits pause?

All of the economists polled by Zee Business expect no more hikes in the current cycle of rising rates.

They are, however, divided over when the central bank will start to reverse the cycle of rising interest rates, with a majority of them expecting no reduction in the current financial year. 

Read more on what to expect from RBI on April 6

Is a repo rate hike coming? If RBI increases the key lending rate once again, it would be a seventh upwards revision in the current cycle of tightening monetary policy

The RBI has already raised the key lending rate by a total 250 basis points — or 2.5 percentage points — to 6.5 per cent in six revisions since May 2022.  

RBI MPC rate decision | Will there be a change in stance on April 6?

According to 80 per cent of the economists, who participated in the Zee Business poll, the RBI is unlikely to change its current stance of policy.

The RBI has maintained its stance at "withdrawal of accommodation" — a switch it made from "accommodative" in May 2022. 

Shaktikanta Das to reveal outcome of MPC's first review of 2023-24 at 10 am 

Is another repo rate hike coming? 

According to 80 per cent — or four in every five — of economists polled by Zee Business, the RBI is likely to announce a hike of 25 basis points in the key lending rate on April 6. The others expect the RBI to announce a status quo at the end of the second bi-monthly meeting of 2023. 

Once the April 6 event is behind, all of the economists who participated in the Zee Business poll expect no further increase in rates in the current cycle. 

Read more on what to expect from RBI's April 3-6 meeting 

RBI MPC Meeting Timings | Check out the full schedule here

The RBI's all-powerful Monetary Policy Committee will meet on April 3, April 5 and April 6, with April 4 being the Mahavir Jayanti holiday. 

This will be its first bi-monthly review of the new financial year, and second of 2023. The RBI normally conducts six bi-monthly reviews of its monetary policy a year, and calls additional meetings in case of emergency — such meetings are known as out-of-cycle reviews.

Here's the full schedule of the financial year that began on April 1, 2023, according to the RBI website: 

• April 3, 5 and 6, 2023
• June 6-8, 2023
• August 8-10, 2023
• October 4-6, 2023
• December 6-8, 2023
• February 6-8, 2024

RBI MPC meeting April 2023 LIVE | Welcome to Zeebiz.com's blog on the second bi-monthly policy review of RBI Governor Shaktikanta Das-led MPC — central bank's all-powerful panel that decides benchmark interest rates for India 

Follow this space to catch minute-by-minute updates on the MPC meeting, the views of Zee Business Managing Editor Anil Singhvi and other experts, realtime analysis, and much more.