Indian stocks markets hold steady ahead of RBI’s monetary policy statement

On Thursday morning, Indian stock indices traded steadily, with all eyes on the Reserve Bank of India’s (RBI) conclusion from its bi-monthly monetary policy review. RBI governor Shaktikanta Das is to read out the monetary policy meeting outcome at 10 am. A majority of analysts, though, expect the RBI will continue to keep the repo rate unchanged at 6.5 per cent. A consistent decline in inflation (currently at an 18-month low) and its potential for further decline may prompt the central bank to put the brake on the rate again.
The RBI in its April meeting paused the repo rate.
Barring the April pause, the RBI raised the repo rate, the interest rate at which it lends to banks, by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
Besides putting a brake on the interest, the RBI may also give a fresh outlook on growth and inflation 2023-24 after GDP numbers for 2022-23 came above estimated figures. As per the provisional estimates released by the National Statistical Office (NSO) recently, real GDP growth for 2022-23 stood at 7.2 per cent, higher than the 7 per cent projected.