The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) commenced its three-day deliberations on Wednesday, with RBI Governor Sanjay Malhotra set to unveil the outcome on June 5. Economists overwhelmingly expect policymakers to leave benchmark interest rates unchanged.
Analysts expect the Reserve Bank of India to keep borrowing costs steady, leaving the benchmark repo rate at 5.25%. However, market participants will be equally focused on the policy statement for clues about inflation trends, growth momentum, crude oil dynamics, the rupee's performance and the central bank's stance on future rate moves.
What To Expect From The June MPC Meeting?
A recent spike in crude oil prices, coupled with mounting tensions across West Asia, has introduced fresh uncertainty into the central bank's policy calculus. "As the situation (a reference to the Iran war) is still evolving, we expect RBI to maintain status quo in the upcoming policy," according to a report by SBI Research.
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RBI is unlikely to make significant policy moves in the near future, said Pranjul Bhandari, Chief India Economist at HSBC, as reported by DD India.
While there may be a gradual move towards a more restrictive stance, she observed that investors are currently factoring in two cuts to interest rates from the fourth quarter of 2026, rather than a prolonged cycle of higher interest rates.
"We don't think that the MPC (monetary policy committee) will go in for a rate hike very soon. This is a supply shock. It is very different from the Covid shock, which was a simultaneous supply and demand shock," Aditi Nayar, Chief Economist at ICRA, said, reported PTI.
According to a report by Financial Express, Radhika Rao, Senior Economist and Executive Director at DBS Bank, said, "We expect the guidance to be cautious, with a pause on rates at the forthcoming meeting."
"Fuel prices have been raised, but the cumulative increase of around 7% is measured. In the absence of significant spillovers into core inflation and with inflation expectations still broadly anchored, the central bank might reason that second-round effects are not evident at this stage, supporting a wait-and-watch approach," Rao added.
When And Where To Watch RBI MPC Decision Live?
The RBI's three-day monetary policy review will take place between June 3 and June 5. The outcome of the meeting, along with the central bank's stance on interest rates, will be announced by Governor Sanjay Malhotra at 10 a.m. IST on June 5. He will address reporters during a press conference afterwards.
The RBI's policy announcement will be streamed live across the central bank's official social media platforms. Viewers can also stay updated with real-time developments and key takeaways through the NDTV Profit's YouTube channel and other digital platforms.
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