RBI keeps rates unchanged, but leaves options open

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept its policy rates unchanged in April, compared with a 25 basis points (bps) hike in the previous policy. However, it maintained its stance of withdrawal of accommodation, and stated its readiness to fight any unexpected rise in inflation. RBI Governor Shaktikanta Das termed today’s action as a “pause, not a pivot.”

The central bank wants to carefully evaluate the consequences of the cumulative 250 bps repo rate hike since May 2022, the fastest pace of hikes in the past decade. The repo rate stands at 6.50%, the highest since February 2019. The real policy rate (repo-inflation), which is still below the pre-pandemic level, is expected to move up as inflation nudges down this fiscal.

Unless inflation rises above than RBI’s forecast, we expect the central bank to pause and watch the impact of past rate hikes on growth and inflation. The RBI will need to closely monitor any spillovers from global market volatility, even as a slowdown in rate hikes by major central banks offers partial relief. As growth slowdown seeps in and inflation moderates, we expect the RBI to cut rates by the end of this fiscal. Access the key highlights from April monetary policy.

Global BFSI sector: The Continued Maturation of Fixed-Income ESG Investing

While 94% of fixed income investors plan to increase allocation to ESG bonds over next two years, inconsistencies around taxonomies, data and regulation impact the investment process. Understand more about the maturation of fixed-income ESG investing.

India IT sector: IT services cos revenue growth to plunge 700-900 bps in fiscal 2024

After strong growth in FY22 and FY23 Indian IT sector likely to see revenue growth decline in FY24 amid global macroeconomic headwinds.?Learn more about the sector's revenue growth and demand scenario.

Global BFSI sector: Growth Mindset in MENA Drives Demand for Banking Services

Coalition Greenwich's latest interviews with leading companies showcase that >80% of large MENA companies have a positive outlook for their businesses in the next 6 to 12 months. Access the survey results.

India infrastructure sector: Rising from the BBB floor

Share of sub-BBB rated players in HAM awards has doubled over the past 3 fiscals

To minimise risks associated with project implementation, bidders for toll road projects will have to furnish additional credit guarantee if their rating falls below 'BBB'. This could lead to a better risk profile for the sector. Download CRISIL's latest report to learn more.

Explore More:

Our Events | Our Insights | Our Blogs | Our Podcasts | Join our Team