RBI MPC Meeting HIGHLIGHTS: No respite on home loan EMIs yet as RBI keeps rate paused; Shaktikanta Das says inflation fight not over

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RBI MPC Meeting LIVE | Bank of Baroda's Madan Sabnavis says June monetary policy more or less along expected lines 

Madan Sabnavis, Chief Economist at Bank of Baroda, says: "While GDP growth will be 6.5 per cent for the year, there will be a tendency for the growth rate to keep declining progressively across the quarters... Inflation will be 5.1 per cent though will be lower at 4.6 per cent in Q1. Subsequently, it will be increasing progressively in the next two quarters. This indicates that it is unlikely that there will be a rate cut until Q4."

Sabnavis points out that the RBI has been clear that the decision taken is for this quarter only and future action will be data-driven. "Hence, this should not be taken as being close to a change in stance. We expect bond yields to be stable, especially at the longer end," he adds. 

RBI MPC Meeting LIVE | Central bank successfully delivered a hawkish pause, says HDFC Bank's Abheek Barua

Abheek Barua, Chief Economist at HDFC Bank, says the RBI's decision to keep its stance at “withdrawal of accommodation” is justified given the still looming inflationary risks. "We expect that growth could be lower at six per cent this fiscal year while there are upside risks to the RBI’s inflation forecast, especially given the impending risks around oil prices and the performance of monsoons," he says. 

"Going forward, the RBI could go for a 'higher for longer' narrative, staying on an extended pause in FY24 while tightening liquidity conditions. Therefore, short-term rates could remain under pressure over the coming months. For the 10-year yield, we could see some pressure return once the government's borrowing program kicks in and a range of 7.2-7.3 per cent is likely in the first quarter," Barua adds. 

RBI MPC Meeting LIVE | Respite for home loan customers only possible if and when repo rate comes down, says Anuj Puri

A respite for home loan customers, in the form of lower EMIs, can only come about if and when the repo rate comes down and banks reduce their interest rates, Anuj Puri, Chairman of property consultant ANAROCK Group, tells Zeebiz.com. 

"Alternately, interest rates can come down if banks announce promotional lending rates to fuel interest, as was seen during the first phase of the pandemic," he adds.

Image: Reuters

Read more on home loan EMIs

RBI MPC Meeting LIVE | Next move more likely to be a cut than a hike, says Trust MF's Sandeep Bagla 

Sandeep Bagla, CEO of Trust Mutual Funds, says growth remains resilient and inflation, although moderating now, could rise in the future as labour market remains tight and the wage-inflation spiral remains a distinct danger. 

"Australia and Canada have raised rates after a pause. We are not out of the woods yet. Liquidity surplus will have to be reduced as Rs 2,000 notes seep into the liquidity in the banking system. It is quite possible that market yields rise by a few basis points as the RBI waits for more economic cues amidst continued global contradictory cues on inflation and growth fronts," he says. 

Rate-sensitive stocks a mixed bag on Dalal Street after RBI's pause

Rate-sensitive stocks — or stocks from spaces sensitive to changes in interest rates — stage mixed moves after the RBI's status quo on the benchmark interest rate as well as the policy stance, which is in line with market expectations.

BFSI shares

Auto 

 Real estate

Consumer durables

Read more on rate-sensitive stocks

Ajay Bagga says first reduction in repo rate may come around October-November

The market expert highlights that the RBI has clearly mentioned that its fight against inflation is not over.

The RBI aims to bring inflation at four per cent over the medium term. The RBI Governor said that just because inflation is within the target range (+/-2 per cent), one should not consider that it is under control. The target is four per cent, Shaktikanta Das reiterated.  

Follow this link to catch latest stock market updates, expert views and much more

RBI MPC Meeting LIVE | Monetary policy action delivering desired results

RBI MPC Meeting LIVE | Central bank to remain nimble in managing liquidity, says Shaktikanta Das

The RBI will be ensuring adequate resources for the productive requirements of the economy, he says. 

RBI MPC Meeting LIVE | Shaktikanta Das says CAD expected to moderate further in Q4, remains eminently manageable 

RBI MPC Meeting LIVE | Rupee has remained stable since January, says Shaktikanta Das

The RBI chief says that the external sector remains resilient for India, as reflected in the current account deficit, external debt and the international investment position.

RBI MPC Meeting LIVE | RBI committed to ensuring sufficient liquidity in system, says Shaktikanta Das

RBI MPC Meeting LIVE | Decision on repo rate, policy in line with economists' estimates

RBI MPC Meeting LIVE | Consumer inflation pegged at 5.1% in 2023-24 vs 5.2% previously 

RBI MPC Meeting LIVE | Central bank's rate-deciding panel decides to lower consumer inflation target for 2023-24

Image: Reuters

RBI MPC Meeting LIVE | India's GDP growth pegged at 8% in April-June, 6.5% in July-September 

According to RBI Governor Shaktikanta Das, the central bank pegs GDP growth at 6 per cent in the quarter ending December 2023 and 5.7 per cent in the quarter ending March 2024. 

RBI MPC Meeting LIVE | GDP growth forecast maintained at 6.5% for 2023-24

RBI MPC Meeting Live: MPC votes 5:1 to change policy stance, says Shaktikanta Das

RBI MPC Meeting LIVE | MPC votes unanimously to leave repo rate unchanged

RBI MPC Meeting LIVE | Repo rate left unchanged at 6.5%

Here's where RBI repo rate has been over past few months

Between May 2022 and February 2023, the RBI raised the repo rate by a total 250 basis points in six revisions. 

Repo rate currently stands at 6.5%; here's a look at four other key policy rates 

• Repo rate: 6.5%
• Standing deposit facility rate: 6.25%
• Marginal standing facility rate: 6.75%
• Bank rate: 6.75%
• Fixed reverse repo rate: 3.35%

RBI Governor Shaktikanta Das to announce repo rate decision in 30 minutes from now

Here's what economists in a Zee Business poll expect from today's policy statement:

What will RBI do with the repo rate?

• No change: 100% of participants
• 25 bps increase: 0%
• 50 bps increase: 0%
• More than 50 bps increase: 0%

Will the RBI change its policy stance from "withdrawal of accommodation"?

• Yes: 25%
• No: 75%

When do you expect the RBI to start reducing the rate?

• Q2FY24: 0%
• Q3FY24 50%
• Q4FY24: 0%
• Next fiscal year: 50%

Will the RBI lower its inflation forecast today?    

• Yes: 50%
• No: 50%

Will the RBI lower its GDP forecasts?    

• Yes: 0%  
• No: 100%

Will the RBI announce measures to boost liquidity?   

• Yes: 25%
• No: 75%

RBI to focus on tightening policy but degree of accommodation will be at par with growth: Axis Bank's Saugata Bhattacharya

Axis bank Chief Economist Saugata Bhattacharya says the RBI is likely to maintain an accommodative policy with more flexibility.

"No rate cut is expected in the near future. Moreover, most of the central banks of the G10 countries are likely to maintain their policy from being accommodative to moderate," he adds. 

Read more on what economists expect in RBI's upcoming policy statement

India's GDP expanded 6.1% in Q4

The current RBI policy review comes days after official data showed the domestic economy grew 6.1 per cent in the January-March period. 

Read more on India's latest GDP data

RBI June 2023 Policy Review | Will MPC announce measures to boost liquidity?

Three-fourths of respondents in a Zee Business poll of economists don't expect announcements aimed at boosting liquidity in the system in the June 8 statement. 

RBI MPC Meet June 2023 | Central bank seen maintaining policy stance

In a poll of economists by Zee Business, 75 per cent respondents said they expect the RBI to change its policy stance from "withdrawal of accommodation" in the June 8 statement. 

RBI April 2023 Policy | All members voted unanimously to leave repo rate unchanged  

In the April review, all of the six members of the MPC voted in favour of a status quo on the repo rate:

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

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

RBI June 2023 Policy Review | Governor Shaktikanta Das-led MPC to reveal outcome of three-day deliberations on Thursday

The latest MPC review — a second scheduled review of the year — comes at a time when major central banks around the globe continue to struggle against red-hot inflation without damaging the pace of economic growth.

Image: PTI

Expect RBI to maintain stance, keep key interest rate unchanged: Mehta Equities' Sharad Chandra Shukla 

Sharad Chandra Shukla, Director at Mehta Equities, expects the RBI to hold the key rates and maintain its current stance of policy in the June review. "The accompanying commentary will likely emphasise the primary objective of controlling inflation, indicating that if the prescribed inflation band is breached, interest rates may be increased in the future," he says. 

MPC pegs GDP growth at 6.5% in 2023-24

In its February review, the MPC pegged growth at 6.2 per cent in the July-September quarter, and 6.1 per cent and 5.9 per cent in the next two quarters respectively. 

For the quarter ending June 2023, the panel projected GDP growth at 7.8 per cent. 

Will RBI lower its GDP forecast in June review?    

All of the responders in a Zee Business poll of economists believe the RBI is unlikely to change its GDP forecasts in the June 8 statement. 

RBI likely to start lowering key lending rate in either October-December or financial year 2024-25 

Half of the responders in a Zee Business poll of economists expect the RBI to start reducing the repo rate — or the key interest rate at which the central bank lends money to commercial banks — in the third quarter of the current financial year, which ends on March 31, 2024.    

The other half expects the first rate cut in the next financial year, which begins on April 1, 2024. 

Will RBI Governor-led MPC cut inflation forecast in June review?

Economists in a Zee Business poll are divided over whether the RBI will change its inflation projections for the country in the June 8 policy statement.

Zee Business Poll: Will RBI cut Inflation forecast in June policy?    

• Yes: 50 per cent
• No: 50 per cent

RBI MPC policy statement due on Thursday; what can you expect from Shaktikanta Das on June 8?

All of the economists polled by Zee Business expect the RBI to maintain a status quo on the repo rate on June 8. 

June RBI policy unlikely to differ much from April: Emkay Global's Madhavi Arora

Emkay Global Lead Economist Madhavi Arora is of the view that the RBI is unlikely to differ much from the April policy, hinging its reaction function to a fluid global situation and domestic growth-inflation backdrop, and retaining policy flexibility.

"The policy tone will likely be balanced yet non-committal, with no change in the stance, thus adding to its inflation-fighting credibility," she says.

Emkay Global believes that the panel saw a dramatic shift in the weightage of its reaction function towards fluid global dynamics in April, "even though they didn't not say that explicitly". 

Will RBI keep repo rate on hold on June 8? Here's what experts think

The RBI is likely to maintain the repo rate at 6.5 per cent on June 8, given easing retail inflation and robust economic growth. The scheduled monetary policy review comes at a time when central banks around the globe are struggling to tame sticky, red-hot inflation without damaging economic growth.

In April, the RBI Governor-led MPC decided to keep the repo rate unchanged at 6.5 per cent, following hikes totalling 250 basis points since May 2022.

Read more on what to expect in RBI's upcoming policy statement

Welcome to Zeebiz.com's blog on the RBI's June 2023 policy review 

Follow this space to catch minute-by-minute updates on what RBI Governor Shaktikanta Das-led Monetary Policy Committee has in store for the economy in terms of the repo rate — the key interest rate at which the central bank lends money to commercial banks, and projections on inflation and GDP, expert views and real-time analyses.

In its last bi-monthly review, the RBI's all-powerful MPC decided to keep interest rates on hold, halting a cycle of tightening monetary policy after lifting the repo rate by a total 250 basis points to 6.5 per cent in six revisions starting May 2022.