The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, is set to announce its decisions during a press briefing today, October 9. The MPC began its three-day meeting on Monday, October 7, to discuss the fourth bi-monthly monetary policy for FY25. The committee will focus on key issues such as interest rates, inflation, economic growth projections, and oil prices.
This is the second MPC meeting since the Union Budget was presented by Finance Minister Nirmala Sitharaman on July 23, and the first following the appointment of three new external members to the RBI’s monetary policy committee on October 1.
For the last nine consecutive meetings, the RBI has maintained the repo rate at 6.50 per cent, balancing inflation control with economic growth objectives. Expectations for this meeting vary, with many analysts watching for potential signals of a change in the RBI’s stance.
When and where to watch the RBI monetary policy announcement
RBI Governor Shaktikanta Das will reveal the MPC’s decisions at 10 am on October 9, followed by a press conference at noon. Both events will be live-streamed on the RBI’s official YouTube channel, Facebook, and X (formerly Twitter).
The committee is expected to consider a range of factors, including inflation (especially food and fuel prices), global economic uncertainties (such as crude oil prices and Middle East tensions), and India’s growth prospects. Many observers believe these challenges may prompt the RBI to reassess its current stance.
RBI monetary policy expectations
The RBI is widely expected to keep the benchmark interest rate unchanged during this MPC meeting.
According to a Bloomberg poll of 13 economists, only three predict a 25 basis point reduction in the repo rate, while the others expect no change for the tenth consecutive meeting. The repo rate currently stands at 6.5 per cent.
State Bank of India’s Chief Economic Advisor, Soumya Kanti Ghosh, anticipates the first rate cut and a shift in stance to occur in December 2024 or February 2025. Meanwhile, Nomura suggests that the October meeting could signal the beginning of a shift in monetary policy.
The last time the repo rate was raised was in February 2023, when it reached its current 6.5 per cent level, maintained through nine bi-monthly reviews since.
What will the RBI’s MPC consider before deciding on a rate cut?
The MPC is likely to focus on factors such as inflationary pressures, global economic uncertainties, and domestic growth prospects. This comes amid ongoing concerns about inflation, particularly with rising food and fuel prices earlier this year.
According to the Ministry of Statistics and Programme Implementation, the All-India Consumer Price Index for August stood at 3.65 per cent, within the RBI’s target range. However, food inflation remains elevated at 5.65 per cent, exceeding the RBI’s medium-term target of 4 per cent.
External factors, such as rising global crude oil prices driven by tensions in West Asia, may prompt the RBI to reconsider its current position.
Who are the new RBI MPC members?
Earlier in October, three new external members were appointed to the RBI’s six-member Monetary Policy Committee by the central government. The new members are Saugata Bhattacharya, economist; Nagesh Kumar, Director and Chief Executive of the Institute for Studies in Industrial Development; and Ram Singh, Director of the Delhi School of Economics at the University of Delhi. They join Governor Das, Executive Director Rajiv Ranjan, and Deputy Governor Michael Debabrata Patra on the committee.
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