The Reserve Bank is likely to maintain status quo on interest rates in its forthcoming monetary policy review but may change the stance in view of retail inflation piercing its upper tolerance limit, global uncertainties created by the ongoing Russia-Ukraine war, and the urgency to protect and boost growth, feel experts.
The RBI Governor-headed rate setting panel -- Monetary Policy Committee (MPC) -- will be holding its first meeting of the 2022-23 fiscal from April 6 to 8. The outcome will be announced on April 8. Aditi Nayar, Chief Economist of ICRA Limited, said in April 2022 policy review, the MPC is expected to revise up its Consumer Price Index-based inflation forecast, whereas the growth projections for 2022-23 would be pared. "Nevertheless, the MPC is unlikely to sacrifice growth to control imported inflation. With upper threshold of medium-term inflation target range being as high as 6 per cent, the MPC is likely to remain growth supportive for longer than other central banks. Overall, we expect a status quo policy in April 2022," she said. Given current uncertainties, Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research, opined that RBI "has limited scope to tighten monetary policy".
