April 2023 MPC
The MPC is expected to increase the repo rate by 25 bps in meeting scheduled this week. A pause in the rate hike cycle is expected after April, when RBI might adopt a wait-and-see approach to assess the impact of full transmission of the cumulative 275 bps increase to play out in the economy.
Changing the stance to ‘neutral’ from ‘withdrawal of accommodation’ could be in the offing as that will allow the MPC to move in either direction later. Retail inflation printed at 6.44% in February and 6.52% in January 2023. We expect inflation for March 2023 to print at 6.1-6.3%.
April 5, 2023