An RBI repo rate hike or a pause on April 6? What economists expect from Shaktikanta Das-led MPC after its 2nd meeting of 2023

RBI MPC rate decision: Is another repo rate hike on the cards? RBI Governor Shaktikanta Das-led Monetary Policy Committee (MPC) — which decides the benchmark interest rates for the country — will reveal its decision on the repo rate at 10 am on Thursday, April 6, at the end of the first three-day meeting of the new financial year. Repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks. 

The April 4-6 meeting of the RBI's MPC comes at a time when major central banks around the globe have the Herculean task of taming red-hot inflation without disturbing the pace of economic growth.

Is an RBI rate hike coming? What to expect from the MPC 

According to four in five economists polled by Zee Business, the RBI is likely to announce a hike of 25 basis points in the key lending rate on April 6. Other economists expect a pause. 

All of the economists who participated in the Zee Business poll expect no further increase in rates in the current cycle. 

A rate hike on April 6 would mean a seventh upwards revision in the current cycle of tightening monetary policy. The RBI has already raised the key lending rate by a total 250 basis points — or 2.5 percentage points — to 6.5 per cent in six revisions since May 2022.  

Will there be a change in stance?

According to 80 per cent of the economists — or four in every five, the RBI is unlikely to change its current stance of policy. The RBI has maintained its stance at "withdrawal of accommodation" — a switch it made from "accommodative" in May 2022. 

After April 6, how many hikes can you expect before the RBI hits pause?

All of the economists polled expect no more hikes in the current cycle of rising interest rates. They are, however, divided over when the central bank will start to reverse the cycle, with a majority of them expecting no reduction in the current financial year. 

Will the RBI announce any revision in its GDP and inflation projections on April 6?

Three in five economists polled by Zee Business expect the RBI's MPC to revise its projections on economic growth as well as consumer inflation.

What did the RBI MPC do in its February 2023 review?

The Shaktikanta Das-led MPC hiked the repo rate by 25 basis points in its first bi-monthly review of 2023, in line with economists' expectations. 

It projected consumer inflation — which it tracks closely for formulating its monetary policy — for the financial year ending March 2024 at 5.3 per cent. Read more on February 2023 RBI policy review

The central bank forecast the country's real GDP to expand 6.4 per cent in the year ending March 2024, with 7.8 per cent in the first quarter, 6.2 per cent in second, six per cent in third and 5.8 per cent in fourth.​  

Catch latest updates on the second RBI policy review of 2023