What does market expect from RBI Monetary Policy meeting?

With RBI Monetary Policy Committee meeting around the corner, the market shall be keenly watching this event to understand RBI’s stance on red-hot inflation.

Last week, the US Fed raised the interest rates by 75 basis points but it was Chairman Jerome Powell’s comments that influenced the market to soar higher. The chairman hinted that the Fed is not likely to raise interest aggressively from here on and is determined to keep inflation under control without denting the economic growth. With RBI Monetary Policy Committee meeting around the corner, the market shall be keenly watching this event to understand RBI’s stance on red-hot inflation. The local CPI has been above the limits of RBI (4 per cent +- 2 per cent) for the past six months.  

In context to market expectations from Friday’s RBI MPC meet, Sumit Chanda, Founder & CEO of JARVIS Invest says, “While there have been some indications of the inflation moderating, with the Brent being still above the $100 mark and a falling rupee, we can expect RBI to hike the repo rate by about 50 bps. However, what has to be noted is their tone, which has mellowed down over the past couple of weeks where they don't want to compromise on growth to fight inflation. They would rather have the fiscal policies address the pressure on the prices than act to reduce liquidity in the system to suppress demand.”  

JARVIS Invest is India’s first AI-based investment advisory firm. Founded by Sumit Chanda in December 2016, JARVIS Invest is an exceptionally intelligent portfolio management tool created by a team of seasoned individuals in the field of investments, research, and technology.