The Reserve Bank of India monetary policy committee (MPC) is set to announce its latest bi-monthly monetary and credit policy on Wednesday, 8 February, concluding a 3-day meeting. Since retail inflation has dropped to remain below RBI’s threshold of 6% for three months in a row, the MPC is expected to increase interest rate by just another 25 bps to take the repo rate to 6.25%, and then pause to reassess. Economists and analysts believe that since inflation is trending down, and global commodity prices have softened, this could be the last rate hike in the ongoing rate hike cycle. After announcing a hike in Feb, RBI is expected to wait for inflation to fall further before considering a shift toward a stimulative stance as Asia’s third-largest economy slows.
