RBI MPC Meeting Schedule August 2022: Date, time - Monetary Policy Review Rate Hike Decision to be out on this day

RBI MPC Meeting Schedule August 2022: Dates, time - The Reserve Bank of India (RBI) had postponed the meeting of its interest rate setting Monetary Policy Committee by a day to August 3 due to administrative exigencies.

RBI Monetary Policy Review Rate Hike Decision to be out on this day, time?

The RBI said the decision of the MPC will be known on August 5 as against the earlier schedule of August 4.

"Due to administrative exigencies, it has been decided to reschedule the MPC meeting from August 2-4, 2022 to August 3-5, 2022," RBI said in a statement.

TIME?

The rate hike decision of the MPC will be known on August 5

RBI MPC bi-monthly monetary policy review

-The MPC announces the bi-monthly monetary policy after deliberations on the prevailing domestic and economic situations.

-The panel, headed by RBI Governor Shaktikanta Das, has two representatives from the central bank and three external members.

Expectations?

-It is widely expected that the RBI may increase benchmark interest rate to cool down high inflation.

-The retail inflation print was 7.01 per cent for June, higher than the RBI's upper tolerance level.

The central government has tasked the RBI to ensure that inflation remains at 4 per cent with a margin of 2 per cent on the either side.

The inflation target for the period April 1, 2021 to March 31, 2026 under the RBI Act 1934 is 4 per cent with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent.

Last week, RBI Governor Shaktikanta Das said that headline inflation, which came at 7.04 per cent for April, is appearing to have peaked.

There is a possibility for MPC to adopt a more aggressive measure and deliver a 0.50 per cent hike in rates like it did in June, joining some developed market and regional central banks who have sent out more decisive signals.

Inflation

To tame inflation, the RBI has raised interest rate by 90 basis points in the last two months. 

The repo rate has gone up from 4 per cent to 4.90 per cent.

Recently, an American brokerage said that the Reserve Bank of India's rate-setting panel will go for a 0.35 per cent hike in the key repo rate at its meeting next week. On the other hand, a 0.25 per cent hike in rates can also not be ruled out, the brokerage said, explaining that MPC could acknowledge that inflation has peaked and there are downside risks to their estimates and there will be measured hikes from here on.

The hike will be accompanied by a change in the policy stance to "calibrated tightening", Bofa Securities said in a report published ahead of the 
Monetary Policy Committee (MPC) resolution which is set to be announced on August 5.

RBI has hiked the rate by a cumulative 0.90 per cent in two tightening moves in May and June, responding to the runaway headline inflation which has consistently overshot the upper end of the target set for the central bank for many months.

Referring to policy actions since April, when RBI introduced the standing deposit facility, the brokerage said the central bank has effectively hiked rates by 1.30 per cent. 

The brokerage expects MPC to retain its FY23 Consumer Price Inflation (CPI) and real GDP growth forecasts, at 6.7 per cent and 7.2 per cent, respectively. "In our base case, we now see the RBI MPC hike policy repo rate by 0.35 per cent, taking it to 5.25 per cent (higher than pre-pandemic level), with stance change to calibrated tightening from withdrawal of accommodation," the report said. 

(With PTI inputs)