RBI Likely To Keep Policy Rates Unchanged, Eyes On Stance: ASSOCHAM

The RBI Monetary Policy Committee is expected to keep its benchmark Repo rates unchanged in the backdrop of the prevalent scenario marked by continuing volatility in global commodity prices, financial markets and supply chain constraints, besides domestic factors like Monsoon prospects, ASSOCHAM said in a statement.

''While retail inflation eased to an 18-month low of 4.7 per cent in April this year and may even drop further, RBI is likely to wait for how Monsoon plays out. It is not only the agricultural output and rural demand which gets impacted by Monsoon but the overall inflation trajectory gets significantly impacted by the rains. So, it would be fair to assume RBI would stick to the existing REPO rate of 6.5 per cent," ASSOCHAM Secretary General, Deepak Sood said.

He said, besides the policy rate, "We would be keenly watching the stance with regard to future trajectory. The RBI has presently been in the withdrawal of accommodation which was brought in following the outbreak of the Covid-19 pandemic."

According to Sood, Shaktikanta Das' commentary on the state of global banking and financial risks, the health of Indian banks and the emerging new financial architecture would also be the important reading of RBI, which is credited with navigating the country's monetary environment with a pragmatic approach during the challenging times since Covid and extreme tight money stance by most of the central banks in the world. 

"No wonder India remains the fastest growing economy of the world, thanks to Government-RBI cohesive policies," he added.