RBI MPC Outlook: When, Announcement Timing, Rate-Hike Expectations & Headwinds

By Malvika Gurung — The new week will house major economic announcements domestically and globally, like the RBI Monetary Policy Committee’s announcement scheduled on Sept 30 and the US GDP figures for the June quarter, among others.

The Reserve Bank of India’s MPC will begin its three-day policy meet and deliberations on Sept 28 and the six-member benchmark rate-setting panel will deliver its decision at 10 am on Sept 30, 2022.

With investors awaiting the announcement, experts and economists expect the central bank to deliver a 50 basis point rate hike again and take the benchmark lending rate to a three-year high of 5.9%.

Economists from Goldman Sachs (NYSE:), SBI (NS:), Barclays (LON:), UBS (NYSE:) and Bank of Baroda (NS:) have forecasted another 50 bps rate hike later in the week, taking the terminal repo rate to 6.25% by December.

According to group chief economist at SBI, Soumya Kanti Ghosh, liquidity becoming deficit after 40 months appears to be another headwind for RBI, which could push the central bank to support the market through a change in the Cash Reserve Ratio and Open Market Operations.

Madan Sabnavis, the chief economist at Bank of Baroda believes that the recent developments in the forex market could prompt a higher quantum of 50 bps to stay on track with other markets in order to retain investor interest.

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