RBI MPC Meeting: More rate hikes on cards? Anil Singhvi decodes why Governor Shaktikanta Das's speech sounds cautious

RBI MPC Meeting: In his comment on the Reserve Bank of India’s (RBI) monetary policy committee (MPC) decision to raise the benchmark interest rate by 35 basis points to 6.25 per cent, Zee Business Managing Editor Anil Singhvi said that the RBI Governor Shaktikanta Das is still very cautious with respect to inflation.

The central bank has kept the headline inflation forecast unchanged at 6.7 per cent despite a minor upward revision to Q3FY23 and Q4FY23 forecasts. It is quite evident that Governor Das is still cautious about the soaring inflation, Singhvi said as the central bank didn’t tweak or change the same.

The RBI Governor said, “The headline inflation is projected at 6.7 per cent in FY23, with Q3FY23 at 6.6 per cent and Q4FY23 at 5.9 per cent. While CPI inflation for Q1FY24 is projected at 5.0 per cent and for Q2FY24 at 5.4 per cent, on the assumption of a normal monsoon.”

Also Read: RBI MPC Meeting LIVE: Home, personal loan EMIs set to further increase as RBI raises key rates - more hikes on cards?

While the FY23 GDP (Gross Domestic Product) forecasts have been reduced to 6.8 per cent from 7 per cent earlier amid stubborn inflation. This denotes that the RBI Governor is concerned about the inflation, the managing editor also said in its analysis.

Das further said, “Real GDP growth for FY23 is projected at 6.8 per cent, with Q3FY23 at 4.4 per cent and Q4FY23 at 4.2 per cent. And real GDP growth is projected at 7.1 per cent for Q1FY24 and at 5.9 per cent for Q2FY24.”

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With the language and tone of the RBI Governor during the December bi-monthly policy, it seems that the monetary policy committee may continue to take rate hikes in future policy meetings as well, Zee Business' Managing Editor noted in his analysis on today's policy meeting.

While concluding, Singhvi said that rate hike is in-line with expectations, and commentary cautious, and going forward rate hikes are possible in order to tame higher inflation.