RBI could announce another repo rate hike on April 6 to manage inflation

The Reserve Bank of India is likely to announce another rate hike on Thursday, following the bi-monthly review of its monetary policy.

RBI Governor Shaktikanta Das is set to address the press at noon tomorrow, with the Monetary Policy Committee having met on April 3 and April 5, with one more day of deliberation set for Thursday, April 6.

The three-day deliberations are part of the central bank's six bi-monthly reviews of its monetary policy in a year.


India's central bank has so far raised the repo rate - the rate at which it lends to banks - by 250 basis points cumulatively since May 2022.

Thursday's announcement could be the first hike of the new financial year and the second hike of the calendar year, with the RBI having announced a 25 bps hike in early February.

With an eye on inflation, the committee is likely to raise the rate, in a bid to help suppress demand in the economy.

These meetings are being watched carefully by stakeholders as almost every central bank tries to take stock of the rising inflation, with a fear of a looming mild recession.

Advisory firm Emkay Global Financial Services says the RBI is likely to hike the repo rate by 25 basis points (100 basis points is equivalent to 1 percentage point).

"In addition (to the rate hike), the neutral stance will give the MPC flexibility to be non-committal on forward guidance, yet subtly give direction on a 'pause'," Emkay said in a report.

Hhowever, according to SBI Research's latest Ecowrap report, the RBI is expected to pause its interest rate hike and the current 6.5 per cent repo rate could be the terminal rate for now. The report asserted that the RBI has enough reasons to pause the repo rate hike in the April meeting.

With inputs from ANI