RBI's MPC meeting starts amid anticipations of status quo on key interest rate

For the fifth consecutive instance, it is anticipated that the MPC will choose to maintain the status quo on interest rates, primarily influenced by the recent surge in GDP growth observed in the July-September quarter and the ongoing moderation in core inflation.

RBI Governor Shaktikanta Das is set to announce the decision of the six-member Monetary Policy Committee (MPC) on December 8.

Despite global economic conditions, India has maintained its position as the world's fastest-growing major economy, with a GDP growth of 7.6 percent in the September quarter, surpassing expectations.

This growth was propelled by government expenditure and advancements in manufacturing.

The government has instructed the central bank to ensure that retail inflation, based on the Consumer Price Index (CPI), remains at 4 percent, with a permissible range of 2 percent on either side.

In October, retail inflation saw a decline to a four-month low of 4.87 percent, primarily attributed to the decrease in food prices.

In its October meeting, the MPC predicted a CPI inflation rate of 5.4 percent for 2023-24, marking a decrease from the 6.7 percent recorded in 2022-23.

The MPC consists of three external members—Shashanka Bhide, Ashima Goyal, and Jayanth R Varma—and three RBI officials. Alongside Governor Das, the RBI officials on the MPC include Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).