The Reserve Bank of India (RBI) will announce its bi-monthly Monetary Policy today. RBI Governor Sanjay Malhotra will announce the decisions taken by the Monetary Policy Committee (MPC) at 10 this morning in Mumbai. The six-member MPC started its three-day deliberations on Wednesday. In April, the Reserve Bank had kept its key policy rate unchanged.
Economists are expecting that the key interest rate will be left unchanged at 5.25 per cent, as the central bank adopts a cautious approach in view of the West Asia conflict posing challenges for inflation as well as economic growth. Few days ago, State Bank of India Chairman C S Setty also said the economic growth process will stabilise if the RBI opts for a status quo in policy rates amid inflation challenges. Some experts are of the view that the Reserve Bank of India may raise its inflation forecast and lower its GDP growth estimate.
The government has set the consumer price index (CPI) based headline inflation target at 4 per cent with the upper tolerance level of 6 per cent and the lower tolerance level of 2 per cent for the central bank. The CPI rose slightly to 3.48 per cent in April, mainly due to higher prices of gold and silver jewellery as well as some kitchen items.
