RBI MPC Time, Investing.com Forecast: Street’s Outlook As Inflation Moderates

By Malvika Gurung

Investing.com -- The RBI Monetary Policy Committee’s three-day meeting that commenced on Feb 6, 2023, will end on Wednesday, Feb 8, and the committee will announce the benchmark lending rate hike at 10 am on the same day.

Investing.com forecasts a rate hike of 25 basis points on Wednesday, taking the key policy rate to 6.5% from 6.25%.

The size of the expected rate hike is lesser than the previous policy, given a cooldown in inflation numbers.

In a note provided to Investing.com, Nilesh Shah, Managing Director, Kotak Mahindra (NS: KTKM ) Asset Management Company, has highlighted that central banks of the world are in admiration of the way RBI has navigated growth and inflation dynamics.

“The RBI has the luxury of raising rates or deferring it as inflation is cooling off and growth is stable. The market will be looking forward to the guidance on the borrowing program of FY24,” he added.

Further, the MPC is expected to maintain its stance of ‘withdrawal of accommodation’ and ease the pace of rate increases, by RBI hiking rates by 25bps in February, notes Ravi Subramanian, MD & CEO of Shriram Housing Finance.

"Retail inflation is within the upper tolerance band of 6% and food inflation has eased off. Housing credit growth has been leading retail credit growth, rising by over 15%,” he stated.

“Given how well the RBI has controlled inflation in recent months, we anticipate that it will soon align with the government's preference for growth. This week a status quo is expected or at the best, one last hike and then rate hikes could be paused,” said Umesh Kumar Mehta of Samco Mutual Fund.