Experts expect RBI to keep interest rates unchanged in April

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India (RBI) is gearing up for its Monetary Policy Committee (MPC) meeting from April 3rd to 5th, 2024, amid a backdrop of robust growth in India and a thriving US economy that influences global trends.

CNBC-TV18 recently convened a Citizen’s MPC discussion to delve into the RBI’s potential moves regarding interest rates and its guidance for the future.

Discussing India’s GDP growth, Sonal Varma, Managing Director & Chief Economist- India and Asia Ex-Japan at Nomura, expressed optimism. She highlighted the strong performance expected for FY24, with estimates inching towards 8%, surpassing the initial 7.6% advanced estimate.

Looking ahead to FY25, Varma anticipates a potential upgrade from the RBI’s projection of 7% to around 7.2%, aligning with recent models forecasting an even higher 7.4% growth.

Shifting the focus to inflation, Soumya Kanti Ghosh, Group Chief Economic Advisor at the State Bank of India, he foresees inflation remaining anchored within the 4 to 5% range for the next fiscal year, aided by potential continued deflation in core elements.

When questioned about the Reserve Bank’s actions regarding interest rates, Sonal Varma stated her expectation that the RBI would opt for a pause. Dr. Samiran Chakraborty, Chief Economist for India at Citi, Ghosh, Chinoy, and Dr. Pronab Sen shared a similar view, anticipating a pause in rates.

Regarding the RBI’s stance, Dr. Sen anticipates it to be neutral, while the others foresee no alteration in the RBI’s stance.

A majority of the 56 economists polled by Reuters believe the Indian central bank will hold off on rate revision until July, a bit longer than the anticipated actions of the US Federal Reserve, on strong growth and persistently high inflation.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow