The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) began its bi-monthly monetary policy meeting on June 6, and the outcome will be announced tomorrow (June 8). Most economists expect the MPC to maintain the status quo on the repo rate, which currently stands at 6.5 per cent. The MPC is meeting against the backdrop of consumer price-based (CPI) inflation declining to an 18-month low of 4.7 per cent in April. The Reserve Bank recently indicated that the May print would be lower than the April numbers. The CPI for May is scheduled to be announced on June 12.

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In the previous rate-setting meeting, held in April 2023, the central bank sprung a surprise by keeping the repo rate unchanged. 

"We are still at a time when the RBI will focus on tightening policy, but the degree of accommodation will be at par with the growth. The RBI is likely to maintain an accommodative policy with more flexibility, so no rate cut is expected in the near future. Moreover, most of the central banks of the G10 countries are likely to maintain their policy from being accommodative to moderate," said Saugata Bhattacharya, senior vice president and chief economist at Axis Bank.

Since May 2022, the RBI has raised the repo rate by 250 basis points. The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks.

Also Read: RBI MPC LIVE updates: RBI begins three-day meet today; will Shaktikanta Das keep key lending rate on hold?  

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