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RBI's MPC Initiates Policy Rate Discussions, Decision On Thursday

In the previous MPC meeting held in April, the RBI paused its rate hike cycle, keeping the repo rate at 6.5 per cent

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The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) commenced its deliberations on 6 June, with expectations leaning towards the central bank maintaining the benchmark interest rates at 6.5 percent. 

Chaired by RBI Governor Shaktikanta Das, the six-member MPC will convene for three days, and the decision will be announced on 8 June.

In the previous MPC meeting held in April this year, the RBI paused its rate hike cycle, keeping the repo rate at 6.5 per cent. Prior to that, the central bank had raised the repo rate cumulatively by 250 basis points since May 2022 to tackle inflation.

The MPC meeting takes place against the backdrop of Consumer Price-Based (CPI) inflation receding to an 18-month low of 4.7 per cent in April. Governor Das recently indicated that the May figures would be even lower. The CPI for May is scheduled to be announced on 12 June.

According to economist Rumki Majumdar from Deloitte India, there is an expectation of a pause in this meeting due to concerns about economic growth, given the slowdown in the global economy, which poses risks of contagion affecting India.

Globally, there are indications that central banks may also opt for pauses or fewer rate hikes as runaway inflation eases, which would further support the RBI in maintaining the current status quo, as stated by Majumdar.

Dhruv Agarwala, Group CEO of, anticipates that the RBI will maintain the benchmark lending rate unchanged, reflecting the easing concerns regarding inflation. Agarwala believes that while some suggest a rate cut to boost growth, the RBI is likely to proceed cautiously and wait before considering such a step.

Agarwala further highlighted the Indian economy's resilience, evidenced by a robust GDP growth rate of 7.2 per cent achieved in the financial year 2022-23. Notably, sectors like construction, trade, and hospitality have experienced significant double-digit expansion. These positive indicators also bode well for the real estate sector, with continued government support aimed at stimulating its growth.

Pradeep Aggarwal, Founder and Chairman of Signature Global (India), also expects the central bank to maintain the status quo in policy rates. However, he suggests that if an opportunity arises, even a small rate cut could have a positive impact on consumer sentiment, benefiting the interest-sensitive real estate sector.

Experts emphasize that the actual decisions made by the RBI will depend on several factors, including economic data, inflation trends, global economic conditions, and the prevailing challenges.

The government has mandated the RBI to ensure that CPI inflation remains within a range of 2 per cent to 6 per cent.