RBI Policy April 2022: Today is the last day of the meeting of the Monetary Policy Committee of the Reserve Bank. It will be known in the next few hours whether the Reserve Bank will increase the repo rate today or not. This is the first monetary policy review of Fiscal Year 2023. In such a situation, today’s decision is very important from the point of view of the economy. Today at 10 am, RBI Governor Shaktikanta Das will explain in detail about the decisions of the Monetary Policy Committee. This meeting is going to take place at a time when the central banks of many big countries including America have announced to increase the interest rate. The question is whether RBI will also announce to increase the interest rate. Even the Central Bank of Pakistan has directly raised the interest rate by 2.50% to 12.25%.
less chance of rate hike
Experts believe that MPC will not increase the interest rate this time too. 12 economists surveyed by Moneycontrol believe that the MPC will keep the repo rate at 4 per cent. However, he added that the RBI may significantly increase its inflation forecast in view of the rapidly rising inflation. There has been a jump in the prices of many things including edible oil, fuel, fruits and vegetables.
Inflation is rising fast
Kaushik Das, Chief Economist (India & South Asia), Deutsche Bank said, “The last meeting of the Monetary Policy Committee was held on February 10. The global situation has changed a lot since then. It is expected that the MPC will change its stance. It can change it from Accommodative to Neutral. It can also increase the reverse repo rate by 40 basis points. He said that as far as the repo rate is concerned, there is no hope of change in it.
Inflation will increase further
The inflation data of the CPI, which came out on March 14, showed that the retail inflation rate has increased to 6.07 percent. It was 6.01 per cent in February. Economists expect inflation to rise further. He says that the inflation rate is expected to rise to 6.5 percent on April 15 when the inflation data comes. This will be the third consecutive month that inflation will exceed the RBI target. RBI has set a range of 2 to 6 per cent for inflation.
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Commodity prices continue to rise
In the monetary policy presented on February 10, RBI had projected inflation at 4.5 per cent. Experts have objected to this. This is because commodity prices have skyrocketed due to Russia’s attack on Ukraine. Fuel prices are increasing day by day. An economist has projected the average inflation for this financial year to be 5.8 per cent.
Continuing rise in crude oil
Bank of America Securities in its report said, “Brent crude prices are up 21 per cent since MPC results on February 10. Petrol and diesel prices in the domestic market have climbed 6.5 per cent. LPG cylinders up to 6 per cent.” It has become costlier. Commercial LPG prices have gone up by 12.5 per cent. Cooking oil prices have gone up by about 12 per cent.”
RBI’s stance may change soon
Experts believe that the way inflation is rising, there is hope of a change in the RBI’s stance soon. It may change its stance on liberal monetary policy. Morgan Stanley has said that the RBI may change the reverse repo rate by 15 to 20 basis points in its monetary policy on April 8. 1 basis point means 0.01 percent. Morgan Stanley has projected the repo rate to increase by 1.25 percent in the financial year 2022-23.