3-day MPC meeting begins today; RBI may maintain its Accommodative Stance

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Mumbai: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will began its three day meeting today. The MPC is scheduled to announce its bi-monthly monetary policy announcement on the 6th of August.

Several economists have predicted that the MPC will maintain its accommodative stance in the August-September period also.

The MPC has maintained a dovish stance for six times in a row till its last meeting, despite retail inflation remaining outside of the comfort zone during April-November 2020 and May-June 2021.

The Singapore based financial services firm DBS has predicted that RBI will keep key policy rates unchanged.

India Ratings and Research (Ind-Ra) belives, RBI will maintain its accommodative monetary policy stance till December.

“ The Reserve Bank of India (RBI) will continue with its accommodative monetary policy stance till end of 2021 as the recent easing of commodity prices would relieve the pressure on the retail inflation in coming months. The price build-up in global commodities, especially for those whose prices are a pass through into the domestic market, had put significant pressure on both retail and wholesale inflation since January 2021. However, there are some indications of easing in their prices now. Moreover, the southwest monsoon, which had been weak in the first half of July, gathered pace in the latter half with the rainfall being only 2% below normal till 28 July 2021” said Ind-Ra.

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