Business
RBI’s monetary policy meet: Here’s some of the expectations

Though the RBI’s raising policy rates in the ongoing monetary policy committee meeting is a “no-brainer”, as its Governor Shaktikanta Das said in a recent interview, investors, however, await the actual degree of percentage hike before taking fresh positions and future course of action in the financial markets.
Besides policy rates, investors also eye other macro-economic forward-looking guidance from the central bank.
The three-day meeting started on Monday.
In early May, the RBI, in a surprise off-cycle meeting, hiked the repo rate, the rate at which the central bank lends short-term funds to banks by 40 basis points (bps) to 4.40 per cent, amidst rising inflation concerns in the economy.
In the same off-cycle meeting, the cash reserve ratio was hiked by 50 basis points to 4.5 per cent essentially to squeeze out some liquidity from the system.
India’s retail inflation accelerated to 7.79 per cent in April, remaining above the tolerance limit of the central bank for a fourth month in a row. It is highly likely that the retail inflation will remain above 6 per cent for another few months.
Besides, wholesale inflation in the country rose to 15.08 per cent in April 2022 from 14.55 percent in March, which has been in double digit for over a year now.
Below are some of the expectations by analysts, market observers, and real estate players on the possible outcome of the ongoing monetary policy meeting:
Deepak Jasani, Head of Retail Research at HDFC Securities
MPC’s off-cycle policy meeting in May clearly pivoted its focus on inflation over growth as a policy priority. The MPC is likely to increase the benchmark repo rate in its ongoing monetary policy review as inflation shows no signs of abatement.
The RBI is likely to follow a nuanced and calibrated approach to rate hikes once it reaches its pre-Covid neutral accommodation (5.15 per cent vs current 4.40 per cent). We expect a 40 basis points rate hike in the upcoming policy meet and see the RBI raising policy rates to 5.15 per cent by calendar year end.
Any further rate hikes will be contingent on the inflation-growth dynamics and would be data dependent.
Hence, equity markets and debt markets have for the most part discounted this rate hike and market reaction would depend more on the statement of the RBI Governor hinting about the future course of action.
Ashish Chaturmohta, Director, Research Group at JM Financial Services
India is currently facing the heat of “imported inflation” owing to rising crude prices, supply chain disruption and global liquidity absorption.
Hence, to control the same, the government has played its role by reducing petrol and diesel prices, bringing in restrictions for exports in order to keep the domestic market stable etc, and on the other hand, the RBI has been very proactive in their actions, which was clearly visible from their 40 base points surprise rate hike.
It’s been the first time in the last several years that the RBI and the Government are both working in a synchronised way. We believe the rate hike would be 30-40 basis points along with a stable outlook on the GDP.
Mohit Batra, Founder and CEO of MarketsMojo
The RBI will try to tackle two issues in its upcoming monetary policy – tackle inflation and ensure that the rupee does not depreciate too much against the dollar. The last time when the RBI revised its inflation target, crude was at $100 per barrel, and now it’s trading at $120 per barrel, suggesting a risk of inflation flaring up is high.
Keeping these facts like rupee depreciation and high inflation rate, I expect RBI to hike the interest rate by 50 basis points.
Satish Kumar, Research Analyst at Choice Broking
We are estimating a repo rate hike of 40 basis points by the central bank in the coming monetary policy to contain the inflation which rose to 8-year high of 7.8 per cent in April. Upside risks to inflation remain elevated given the prevailing high crude oil and commodity prices amidst supply side concerns.
Pushpender Singh, MD of JMS Group
The outcome of the MPC meeting is pretty obvious, most probably leading to an inevitable hike in the repo rate in lieu of a concerted effort to lower the inflation rates, which perhaps is becoming a huge aberrant in the growth parameters of the economy. I do not expect to see a massive increase in the repo rate but definitely, a slight rise will be announced to curb the dwindles and shift the radar of growth in the right direction.
Aman Sharma, Director at Spaze Group
There are great chances of a repo rate hike yet again in a bid to control the inflationary rates that grow unabated despite direct attempts to stop it. It has to be accepted with a pinch of salt by the industries across the segments which will face teething troubles due to the probable hike after the RBI’s MPC meeting.
A surge in the repo rate is almost certain, I do not think there will be a sharp insurgence but somewhat a marginal increase to let the inflationary challenges deflate and the numbers drop.
Mohit Nigam, Head, PMS, Hem Securities
The repo rate is anticipated to be raised by another 40-50 basis points by the MPC. This decision is influenced by rising price levels as a result of ongoing geopolitical tensions and supply-chain pressures, which are driving inflation higher. The primary goal of the RBI would be to keep inflation under control and minimise its second-round impacts.
Inflationary pressures on food and fuel remain high, and supply-chain disruptions continue to put upward pressure on input costs. The biggest issue is that if rates are raised further, urban demand, which was formerly a major concern, may dwindle. Agricultural output will be supported by favourable weather conditions, thus rural demand may not be affected as much.
Ashish Khandelia, Founder of Certus Capital
We expect the repo increase to be between 40-50 basis points in upcoming MPC meeting with future increases leading to 5.75 per cent (where we were exactly 3 years ago) or upwards by the end of FY23. 40 basis points increase in May caused homes loans to move in to 7 per cent +/- range from 6.5 per cent earlier.
And by the end of this financial year, home loan rates will likely touch 8 per cent. This is unlikely to derail the housing momentum, but it will certainly soften it. Coupled with increasing prices, the growth may slow down a bit in FY23, after a record FY22.
National
Supreme Court rebukes Telangana CM over statement made in Assembly

New Delhi, April 2: The Supreme Court on Wednesday rebuked Telangana Chief Minister A. Revanth Reddy over his statement made in the state Assembly, saying he was making mockery of the anti-defection law.
The Chief Minister had stated that there would be no by-elections even if the MLAs of the opposition Bharat Rashtra Samithi (BRS) defect to the ruling Congress.
“If this is said on the floor of the house, your Hon’ble CM is making a mockery of the 10th Schedule,” the bench of Justices B.R. Gavai and A.G. Masih, slamming the Chief Minister while hearing petitions filed by BRS leaders, seeking disqualification of BRS MLAs who defected to Congress last year.
BRS MLA P. Kaushik Reddy had filed the petition seeking the disqualification of MLAs T. Venkata Rao, Danam Nagender, and Kadiyam Srihari for defecting to the Congress after winning the election on BRS tickets.
The Telangana High Court, in November last year, directed the Speaker of the Telangana Assembly to decide on the disqualification petitions within a ‘reasonable time’.
Later, Kaushik Reddy and another BRS MLA K. Pandu Vivekananda and BJP MLA A. Maheshwar Reddy filed separate petitions in the Supreme Court, seeking direction to the Speaker to decide on the disqualification petitions in a time-bound manner.
The Supreme Court is also hearing the petition of BRS Working President K. T. Rama Rao, seeking the disqualification of seven other BRS MLAs who switched loyalties to Congress.
During the hearing on the petitions on Wednesday, counsel for the petitioners C. Aryaman Sundaram brought to the court’s notice the statement made by the Chief Minister in the Assembly on March 26.
Appearing for the respondents, senior advocate Mukul Rohatgi argued that Assembly proceedings were not in question in the present case.
Justice Gavai suggested that the senior lawyer warn the Chief Minister against making such controversial statements in the legislature.
“We know we are slow in issuing contempt notices, but we are also not powerless,” he said.
The bench observed that statements made in legislatures have sanctity.
“When politicians say something in the Assembly, it has got sanctity. In fact, the judgments say that when we interpret laws, the speech given on the floor of the House can be used for interpreting,” it said.
Justice Gavai told Rohatgi to warn the Chief Minister against repeating the mistake.
The judge was apparently referring to the CM’s remark made in August last year about the bail granted to BRS MLC K. Kavitha in Delhi liquor policy case. Revanth Reddy had reportedly stated that Kavitha could secure bail within five months as the vote bank of the BRS was transferred to the BJP.
“Do we pass our orders in consultation with political parties? We are not bothered about which party politicians belong to… We are not bothered by politicians’ criticism of our orders. We do our duty as per the Constitution and our oath,” Justice Gavai had said while addressing Rohatgi and Siddharth Luthra, appearing for Revanth Reddy.
After the Supreme Court faulted the Chief Minister for his remarks, he unconditionally expressed his regret.
Speaking in the Assembly last month, the Chief Minister told BRS MLAs who switched loyalties to the Congress that they need not worry as by-elections will not be held.
The Chief Minister stated that during the BRS rule, turncoats took oath as ministers and no by- elections were held in the previous government. “How will by-elections be held now?” he asked.
The Chief Minister’s statement drew a strong reaction from the BRS leader Rama Rao, who had said that they would bring this to the court’s notice.
National
Bengal Police unnecessarily creating panic over Ram Navami: BJP

Kolkata, April 2: A senior leader of BJP from West Bengal, on Wednesday, accused the West Bengal Police of creating unnecessary panic among common people over the forthcoming Ram Navami festival.
BJP’s former national vice-president and former party Lok Sabha member Dilip Ghosh said that the decision of the police authorities to cancel the leaves of all cops, except for emergency reasons, from April 2-9 was unnecessary.
“Such panic-driven decisions are prompted only during Hindu festivals. The police should take care of those who create trouble. Hindus are well organised and they perform their religious rituals peacefully. Lakhs of people participate in Durga Puja, and no tension is created. It has become a habit of the ruling party to create tension and panic,” Ghosh said.
He also said that the chances of untoward incidents over the Ram Navami processions will not be there if the police strictly handle those who want to create tension on the occasion.
Last week, two senior officials of West Bengal Police told media persons that they have got specific intelligence inputs on some vested interests trying to instigate violence in the coming days, especially targeting the forthcoming Ram Navami festival.
“There are plans to instigate people through different posters or posts. The police are on alert. There might be attempts to instigate tension among people from different communities, especially focusing on the occasion of Ram Navami. We requested people not to get instigated. There is no need to worry. But at the same time, we also request people to alert the local police in case they notice any suspicious activities in their respective areas,” said Additional Director General (South Bengal) Supratim Sarkar on March 29.
Recently, there were reports of communal clashes from Mothabari in Malda district.
Recently, the Leader of the Opposition in West Bengal, Suvendu Adhikari, said at least 2,000 rallies, big and small combined, will be brought out on the occasion of Ram Navami this year.
He also said that participants at the rallies on Ram Navami this year will be double compared to last year.
“Ram Navami will be celebrated this year in a major way. I will be there on the streets on that day. Last year, around 50 lakh Hindus were on the streets to participate in rallies on the occasion of Ram Navami. Last year, there were 1,000 rallies. This year there will be 2,000 rallies and around one crore Hindus will participate in those rallies this year,” he claimed.
International
Man rescued in Myanmar’s Nay Pyi Taw five days after earthquake

Yangon, April 2: A 26-year-old hotel staff member was rescued from the rubble of a collapsed hotel building in Myanmar’s Nay Pyi Taw on Wednesday, five days after the 7.7-magnitude earthquake struck the country, according to the State Administration Council’s information team.
Two people were trapped under the debris, and rescue teams from the Myanmar Fire Services Department and Turkey successfully pulled one survivor to safety, the information team said.
The operation at the hotel began at around 3:00 p.m. local time on Tuesday, and the man was rescued by approximately 00:30 a.m. local time on Wednesday, it said.
Efforts are ongoing to locate and rescue the remaining trapped individuals, media reported.
The death toll from the 7.7 magnitude earthquake in Myanmar has risen to 2,719, with approximately 4,521 people injured and 441 others still missing, said the country’s Prime Minister Min Aung Hlaing.
Meanwhile, Aung Hlaing, head of Myanmar’s junta, rejected ceasefire proposals from Ethnic Armed Organisations (EAOs) and declared a continuation of military operations.
This move directly affects humanitarian efforts as the casualties from the devastating earthquake escalate.
“Some ethnic armed groups may not be actively engaging in battles right now, but they are gathering and training in preparation for attacks. Since this is a form of aggression, the military will continue necessary defence operations,” Hlaing said during a fundraising event in Naypyidaw on Tuesday.
A powerful 7.7 magnitude earthquake, followed by a 6.4 magnitude aftershock minutes later, struck Myanmar’s Mandalay region on Friday, causing massive casualties and damage.
Myanmar announced on Monday a week-long mourning period following the earthquake that struck the nation and wrought widespread destruction.
As the earthquake left entire communities in ruins, reports suggest that concerns have arisen about the potential for Myanmar’s military junta to direct humanitarian funds to affected areas. It is stated that supplies are driven to the areas the junta favours rather than those most in need of help.
The United Nations and international aid organisations are struggling to respond to the devastating earthquake, which destroyed several cities such as Mandalay, Sagaing, and Naypyitaw, and displaced tens of thousands of people. The hospitals are trying to cope with the high influx of patients.
However, the United Nations, the US, India, the European Union, and several other nations and international organisations have sent aid and rescue efforts for earthquake victims in Myanmar.
The Indian Army and Navy mobilised their resources with unwavering resolve, providing both immediate rescue support and long-term aid to the affected communities.
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