RBI Monetary Policy Committee Meeting: April 3-5, 2024

The forthcoming RBI Monetary Policy Committee (MPC) meeting, slated from April 3-5, 2024, marks the inauguration of crucial monetary deliberations for the fiscal year 2024-25 (FY25). Under the stewardship of RBI Governor Shaktikanta Das, the MPC will convene to deliberate on pivotal monetary policy decisions.

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1. ​Current Rate Status: The repo rate has remained steadfast at 6.5 per cent since February 2023.

2. ​Market Dynamics: Analysts anticipate the RBI to uphold its current policy stance amid prevailing market fluctuations, particularly impacting interest rate-sensitive equities.

3. ​Dovish Outlook: Aligned with the recent dovish position adopted by the US Federal Reserve, the focus is on harmonising India's inflation with its prescribed target.

4. ​Consensus: A unanimous consensus among 56 economists polled by Reuters indicates an expectation for the RBI to maintain the repo rate at 6.50 per cent during the impending meeting.

5. ​Predictive Trends: Despite prevailing expectations for a status quo, there's a division among economists regarding the timeline for potential rate adjustments, with median projections hinting at possible reductions to 6.25 per cent by September's conclusion and six per cent by year-end.

Market Sentiment:

1. ​Volatility Projection: Anticipations suggest a continued phase of volatility during the MPC session.

2. ​Optimistic Outlook: Market sentiment is poised to remain buoyant, influenced by the performance of key indices like the Nifty 50 and banking index.

3. ​Strategic Advice: Traders are advised to channel their focus towards large-cap stocks and resilient sectors to capitalize on potential opportunities amidst the prevailing market dynamics. 

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Recap of February 2024 Meeting:

1. Timeline: The final MPC gathering for FY23-24 transpired from February 6-8, 2024.

2. Rate Determination: The RBI opted for a status quo, maintaining the benchmark interest rate at 6.5 percent for the sixth consecutive session, citing inflationary apprehensions.

3. Voting Pattern: While the majority favored maintaining the status quo, one member advocated for a 25 basis point reduction.

4. Key Rates: Essential rates including the Fixed Reverse Repo Rate, bank rate, marginal standing facility (MSF) rate, and standing deposit facility rate remain unchanged at 3.75 percent, 6.75 percent, 6.25 percent, and 6.25 percent respectively.

In navigating the intricate interplay of global and domestic economic dynamics, the forthcoming decisions of the RBI hold paramount significance in shaping India's monetary landscape.

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