ANI
06 Feb 2023, 14:33 GMT+10
Mumbai (Maharashtra) [India], February 6 (ANI): The three-day Reserve Bank of India monetary policy committee meeting commenced on Monday with the outcome from the deliberations set to be announced on February 8.
In its December monetary policy committee meeting, the RBI raised the policy repo rate, the rate at which the RBI lends money to all commercial banks, by 35 basis points (bps) to 6.25 per cent.
SBI Research, in a report published before the RBI meeting started, said India's central bank is expected to pause the policy rate hike during the February 6-8 review meeting.
"In the current rate cycle, rate actions, both hikes and cuts, have been largely synchronized. We find evidence that synchronized rate actions have resulted in increased market volatility and financial stability in both the period post global financial crisis and the current regime," SBI Research report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, said.
"We believe at 6.25 per cent, it could be the terminal rate for now..." the report added.
On CPI or retail inflation, the report said it could decline closer to 5 per cent by March 2023 and 4.2 per cent by April.
India's retail inflation during the month of December was at 5.72 per cent, versus 5.88 per cent in November and 6.77 per cent during October.
India's retail inflation was above RBI's six per cent target for three consecutive quarters and had managed to fall back to the RBI's comfort zone in November 2022.
In its fight against rising inflation, RBI had already hiked the key policy rate by 225 basis points since May 2022 to 6.25 per cent to cool off domestic retail inflation that stayed above its upper tolerance limit for nearly three quarters. Raising interest rates typically cools demand in the economy, thereby putting a brake on inflation. (ANI)Get a daily dose of Haiti Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
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