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

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4 years ago

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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.

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CBDT extends tax audit deadline to Oct 21, taxpayers can file returns till Nov 21

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3 hours ago

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September 28, 2026

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New Delhi, Sep 28: The Central Board of Direct Taxes (CBDT) has extended the due date for furnishing Return of Income for assessment year (AY) 2026-27 from October 31 to November 21 for persons subject to audit under the Income-tax Act, 1961, according to an official statement issued on Monday.

Accordingly, the ‘specified date’ for furnishing the audit report also stands extended from September 30 to October 21, the statement said.

A formal notification to this effect is being issued separately, the statement added.

The demand for an extension had gathered momentum in recent weeks, with several chartered accountant associations and tax professionals seeking that the deadline be pushed to October 31. Tax professionals had also raised concerns over the time required to complete audit procedures, verify disclosures, and reconcile information available across various tax and financial records.

The extension will give taxpayers and their auditors more time to complete the audit process and furnish the required report on the income-tax e-filing portal and is expected to facilitate the ease of doing business.

Meanwhile, the government’s net direct tax collection has recorded a robust 13 per cent growth to surpass the Rs 12.12 lakh crore mark between April 1 and September 17 of the current financial year compared to the same period of the previous financial year, according to official data.

Gross direct tax collections ⁠rose over 15 per cent year-on-year basis to Rs 14.3 lakh crore during the same period, the figures showed.

Corporate tax mop-up grew 19.48 per cent to about Rs 5.56 lakh crore, while personal income tax and collection from Hindu undivided families increased 6 per cent to over Rs 6.16 lakh crore. Securities Transactions Tax (STT) collection jumped 53 per cent to Rs 40,214 crore between April 1 and September 17 compared to the same period of the previous year.

Refund issuance surged by over 29 per cent to cross Rs 2.2 lakh crore during this period, the data further showed.

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India’s industrial growth surges to 8 pc in August, manufacturing sector shines

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6 hours ago

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September 28, 2026

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New Delhi, Sep 28: India’s industrial production surged to 8 per cent in August this year, compared to the same month of the previous year, driven by a robust performance in the manufacturing sector, according to the data released by the Ministry of Statistics on Monday.

The manufacturing sector, which accounts for more than three-fourths of the index of industrial production (IIP), posted an impressive 9 per cent growth during August compared to the same month of the previous year.

“In a record performance, the manufacturing sector has recorded growth of 8 per cent or more in the last three consecutive months,” according to the official statement.

This augurs well for the economy as the sector plays a key role in providing quality jobs to the young graduates passing out from the country’s engineering institutes and universities.

Within the Manufacturing sector, 18 out of 23 industry groups have recorded a positive growth in August over the same month last year. The top three positive contributors for the month in this segment are the manufacturing of motor vehicles which recorded a 25.2 per cent growth, along with the manufacturing of electrical equipment (30.9 per cent) and the manufacturing of machinery and equipment (25.3 per cent).

The electricity and gas supply sector recorded a strong growth of 12.3 per cent during August while Water Supply, Sewerage & Waste Management posted a 6.3 per cent growth.

However, the mining sector posted a negative growth of (-) 5.6 per cent during the month.

The figures on use-based classification show that the production of capital goods, which comprise machines used in factories, jumped by a robust 16.9 per cent in August this year. This segment reflects the real investment taking place in the economy, which has a multiplier effect on the creation of jobs and incomes going ahead.

There was also a double-digit increase of 11.1 per cent in the production of consumer durables such as electronic goods, refrigerators, and TVs during August reflecting the higher consumer demand for these items amid rising incomes. Consumer non-durables such as soaps and cosmetics posted a growth of 2.1 per cent growth during the month.

The infrastructure and construction goods sector also recorded a growth of 6.4 per cent during the month driven by the Government’s big ticket investments in highways, ports and railway projects which create large-scale employment and drive up the overall economic growth rate.

The Ministry of Statistics has decided to adopt output PPI as a deflator in place of WPI for item groups for which output is collected in value terms. This affects 234 out of the 463 item groups in the IIP basket, representing 36.02 per cent of the total index weight, the official statement said.

The ministry has now revised and released the entire IIP 2022-23 series with Output PPI and it supersedes the earlier WPI based IIP 2022–23 series released on 1st June 2026, the statement explained.

The Ministry of Statistics and Programme Implementation (MoSPI) released the new series of the All India Index of Industrial Production (IIP) with base year 2022–23 on 1st June 2026, using the Wholesale Price Index (WPI) as the deflator.

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Silver tumbles over Rs 7,000 on MCX, slips below Rs 2.28 lakh amid global sell-off

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8 hours ago

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September 28, 2026

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Mumbai, Sep 28: Silver prices witnessed a sharp decline on the Multi Commodity Exchange (MCX) on Monday, with the white metal plunging more than Rs 7,000 and falling below the crucial Rs 2.28 lakh-per-kg mark amid a broad-based sell-off in precious metals.

The steep fall comes as rising crude oil prices have heightened inflation concerns globally, strengthening market expectations that the US Federal Reserve may keep interest rates higher for longer or consider further policy tightening.

Higher interest rates and elevated US Treasury yields typically reduce the appeal of precious metals, which do not offer interest income, while a stronger dollar makes commodities priced in the US currency more expensive for overseas buyers.

During noon trade, the December silver futures contract on MCX was trading at Rs 2,27,494 per kg, down Rs 7,202, or 3.07 per cent, from its previous close of Rs 2,34,696 per kg.

Commenting on technical outlook, market experts said that the immediate resistance is at Rs 232,000–Rs 233,000, followed by Rs 236,000–Rs 237,000. “Immediate support is at Rs 227,000–Rs 228,000, followed by Rs 223,000–Rs 224,000,” analysts stated.

“The RSI at 41.12, below its signal line, indicates fading momentum,” analysts added.

COMEX Silver opened at $64.66 and is trading near $62.40, down 3.72 per cent on the day. It has slipped below the $63.50–$64.00 zone, which previously acted as support and is now likely to act as resistance, and is testing the $61.50–$62.00 support region.

“Silver remains weaker than gold in today’s session. Immediate resistance is at $63.50–$64.00, followed by $65.50–$66.00. Immediate support is at $61.50–$62.00, followed by $59.50–$60.00,” market watchers stated.

“The price remains below the 20-, 50-, 100- and 200-day EMAs, while the RSI continues to edge lower,” experts noted.

Meanwhile, USD/INR opened at 95.80, up 0.13 per cent on the day, and is trading just below the 96 mark. Immediate resistance is at 96.00–96.10, followed by 96.40–96.50.

“Immediate support is at 95.70–95.80, followed by 95.40–95.50. The pair remains above its key short-term moving averages. The RSI at 59.51, above its signal line, reflects a mild bullish, or rupee-weakening, bias,” market watchers mentioned.

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