RBI MPC meeting: Rate hike inevitable in June policy, but Governor Shaktikanta Das’ commentary key monitorable, says Anil Singhvi

The rate hike is inevitable as expected in the June policy meeting of the Reserve Bank of India (RBI), said Zee Business Managing Editor Anil Singhvi. The market has prepared itself for a rate hike of between 0.5 - 0.75 per cent, however, the key monitorable would be Governor Shaktikanta Das’ commentary. 

Terming it a 'Make or Break' policy, the managing editor expected that the RBI would be able to curb the inflation worries post the June policy, and there should not be any further hike upcoming MPC meetings. 

The Monetary Policy Committee of the RBI is scheduled to meet between June 6-8, 2022, for the bimonthly policy decision. The central bank in May had announced a 0.4 per cent interest rate hike. 

Singhvi said that the 0.5 per cent rate hike is anyway expected. However, if the rate hike of 0.75 per cent comes in and RBI Governor Shaktikanta Das still looks worried in his commentary, then it will be a little difficult situation, he added. 

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“On the contrary, if RBI Governor is optimistic in his commentary, with a rate hike of 0.75 per cent then the market perhaps would see it as Neutral to Less Negative. Similarly, a 0.5 per cent hike and good commentary may also be looked by the market as Neutral to Less Negative,” Singhvi said. 

“We have balanced ourselves with respect to 0.5 per cent rate hike and somewhere are also ready for 0.75 per cent rate hike sentimentally,” the managing editor said.  

In the absence of other factors, the global markets, including India, have a clear view on economic data, and therefore inflation, interest rates, and liquidity are the big topics for the markets, central banks, and governments across the globe, Singhvi said in his Editor’s Take. 

Before concluding, the managing editor said that the June policy is most important with respect to the economy and market as it would give broad guidance accordingly to adjust the investors’ portfolio.