The RBI Monetary Policy Committee is expected to keep its benchmark repo rates unchanged on Thursday in the backdrop of the prevalent scenario marked by continuing volatility in global commodity prices, financial markets and supply chain constraints, besides domestic factors like monsoon prospects, according to Assocham.
“While retail inflation eased to an 18-month low of 4.7 per cent in April this year and may even drop further, RBI is likely to wait how monsoon plays out. It is not only the agricultural output and rural demand which gets impacted by Monsoon, but the overall inflation trajectory gets significantly impacted by the rains. So, it would be fair to assume RBI would stick to the existing repo rate of 6.5 per cent,” Assocham Secretary General Deepak Sood said.
He said that besides the policy rate, ”we would be keenly watching the stance with regard to future trajectory”. The RBI has presently been in the withdrawal of accommodation which was brought in following the outbreak of Covid 19 pandemic.
Sood added that RBI Governor Shaktikanta Das’ commentary on the state of global banking and financial risks, health of Indian banks and the emerging new financial architecture would also be important reading of RBI, which is credited with navigating the country’s monetary environment with a pragmatic approach during the challenging times since Covid and extreme tight money stance by most of the central banks in the world, ”No wonder India remains the fastest growing economy of the world, thanks to Government-RBI cohesive policies”.
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