NEW DELHI: With little or no material change in the overall trajectory of economic variables since April, the forthcoming monetary policy committee (MPC) meeting is likely to be a non-event. According to economists, the Reserve Bank of India (RBI) will keep rates unchanged and continue to maintain an accommodative policy stance. However, any hint on policy normalisation will be keenly watched.
“Our reading of high frequency activity indicators suggests no reason for the RBI to adjust its overall growth outlook, though its inflation forecasts may need to be revised modestly higher. We expect the RBI to follow a relatively quick normalisation cycle, but the time to signal this change of course is in the future, not the present. Only once the central bank is confident in the sustainability of a growth revival, the bank will begin to hike interest rates,” said Rahul Bajoria, chief economist, Barclays India. The GDP growth forecast for FY22 is pegged at 9.5%.