Monetary Policy Will be Decided in RBI MPC Meeting, Repo Rate Will be Announced on February 8

The meeting of the Monetary Policy Committee (MPC) is starting from today to decide the repo rate by the Reserve Bank of India (RBI). Its results will be announced on 8 February. This meeting is taking place at a time when recently the pace of increase in interest rates has been reduced by the US Central Bank Fed Reserve. In this meeting also, the biggest issue before the central bank will be to reduce inflation, because in the first three quarters of 2022, the inflation rate has been above the inflation band of 2-6 percent set by the RBI. However, the inflation rate has been below 6 per cent in November and December.

Runen Banerjee, partner and leader, economic advisory services, at PwC India, said the 25 basis point hike by the US Fed is expected. The inflation rate is also below the maximum level fixed by the RBI. There are not many options left before the MPC to increase the interest rate. Kotak Institutional Equities said in a report that RBI may increase the MPC repo rate by 25 basis points to 6.5 percent.

In 2022, RBI has increased interest rates five times to control inflation due to this the repo rate has increased from 4 percent to 6.25 percent.