NEW DELHI: The RBI Monetary Policy Committee (MPC) will announce whether it is raising benchmark lending rates or maintaining the status quo on Wednesday, after the conclusion of the bi-monthly review meeting.
This meeting has been keenly watched because it is speculated that the MPC might decide to hike rates for the first time since January 2014 in response to the rising inflation concerns. However, a substantial portion of analysts also believe that the RBI might choose to wait and watch for another two months.
The six-member MPC, headed by Reserve Bank of India (RBI) Governor Urjit Patel, is meeting for three days for the first time instead of the usual two days due to some administrative exigencies.
The primary reasons why a rate cut has become probably in the opinion of analysts is the sharp firming up of crude oil prices, even with the most recent correction factored in. While this has raised inflation concerns, the 7.7 per cent growth rate and the forecast of a normal monsoon have also reduced the calls for a rate cut.