RBI may hold rates, issue FY25 outlook

Economists polled by Mint expect little change in MPC stance

- Gopika Gopakumar

The Reserve Bank of India’s (RBI’s) rate-setting panel may keep the key policy rate unchanged at 6.5% in its monetary policy review this week, a Mint poll of 10 economists showed.

The economists expect the Monetary Policy Committee (MPC) to sound optimistic on growth and to reiterate its commitment to the central bank’s 4% headline inflation target.

Most economists polled also expect the MPC to keep inflation and GDP growth forecasts unchanged at 5.4% and 7%, respectively, for FY24. They also expect RBI to announce its growth forecast for FY25.

The committee is scheduled to meet for three days beginning 6 February and announce its review on 8 February. In a report released on 2 February, Goldman Sachs’s assessment of the MPC’s position on the repo rate and headline inflation target was similar to the predictions of Mint’s poll of economists.

In addition, the report said: "We further expect RBI to retain its tight liquidity stance as signalled by the comment that they will ‘remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth’."