RBI panel begins 3-day monetary policy review meet amid expectations of status quo on interest rate

Mumbai: The six-member Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, began its three-day policy review deliberations on Monday amid expectations of status quo on interest rate. Experts are of the view that the RBI may not change the benchmark lending rate (repo) despite moderation in economic growth and easing inflation. In its last bi-monthly monetary policy, the RBI had kept the repo rate (at which RBI lends to other banks) unchanged at 6.5 percent with warning that volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation. [caption id=“attachment_5129811” align=“alignleft” width=“380”] Reserve Bank of India. Reuters[/caption] The MPC meet will continue till 5 December. The decision of the MPC will be placed on the RBI’s website in the afternoon of 5 December. Since the previous policy announcement, the rupee has appreciated against the US dollar and moved above the psychologically crucial mark of 70. Global crude oil prices too have softened significantly, slipping below $60 per barrel from $86. However, India’s economic growth slowed to 7.1 percent in the September quarter after peaking to an over two-year high in the first three months of this fiscal, as consumption demand moderated and farm sector displayed signs of weakness. The growth in Gross Domestic Product (GDP) in July-September is the slowest in three quarters but better than 6.3 percent in the same period of the previous year. The Indian economy grew by 8.2 percent in the April-June quarter, according to data released by the Central Statistics Office (CSO). Retail inflation fell to one-year low of 3.31 percent in October on the back of cheaper kitchen staples, fruits and protein-rich items, official data showed.