RBI monetary policy committee meet: An overview

The Reserve Bank of India’s (RBI) monetary policy committee
(MPC) ended its three-day deliberations on September 30, amid expectations of
another round of hikes in policy lending rates to contain inflation. The
six-member committee, headed by RBI Governor Shaktikanta Das, hiked the repo rate by 50 basis points to 5.9%. In the last 5 months, Repo Rate saw an increase of 190 bps. The Monetary Policy Committee (MPC) decided to remain focused on ‘withdrawal of accommodation‘. 

The Standing Deposit Facility (SDF) rate stands adjusted at 5.65%. The Marginal Standing Facility (MSF) and bank rate are revised at 5.9%.

In the previous meeting, which was held from August 3 to August 5, the RBI increased the repo rate by 50 bps to 5.40%. 

Also Read | RBI MPC Meet: 10 Key highlights from Governor Shaktikanta Das’ speech

In May month’s unscheduled meeting, the RBI increased the
repo rate by 40 basis points (bps). Before May 2022, the last time the RBI changed
the repo rate was on March 27, 2020, during the first wave of the COVID-19
pandemic.

As the highly anticipated meeting heads to a conclusion,
here is an overview of what happened in the last ten MPC meetings:

August 3- August 5, 2022

The 37th RBI MPC meeting was held from August 3 to August 5. RBI Governor Shaktikanta Das announced a 50 basis points hike in the policy repo rate to 5.40%. The MPC had decided to stay focused on withdrawal of accommodative stance to observe inflation.

Also Read | Why interest rates are being hiked globally?

June 6- June 8, 2022

The 36th MPC meeting commenced from June 6 to June 8. RBI
Governor Shaktikanta Das announced a 50 basis points hike in the policy repo
rate to 4.90%. The monetary policy committee’s decision was unanimous and it
had decided to keep the stance of “withdrawal from accommodative”.

May 2- May 4, 2022

The 35th off-cycle MPC meeting commenced from May 2 to May 4. Governor Shaktikanta Das announced a 40 basis points hike in the policy repo rate to 4.40%. The rate hike was announced to ensure that inflation stays within the RBI tolerance level as well as to support growth.

Also Read | Centre hikes DA by 4% for government employees, pensioners

April 6- April 8, 2022

The first MPC meeting for fiscal 2022-23 was held from April 6 to April 8. During the 34th meet, the MPC kept the repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0%. The committee also maintained an accommodative stance.

February 8- February 10, 2022

The 33rd MPC meeting was held from February 8 to February 10. The rate-setting panel reviewed surveys conducted by the RBI to measure consumer confidence. While maintaining its accommodative stance, the MPC announced that the policy repo rate would remain unchanged at 4.0%. The reverse repo rate also remained the same at 3.35%.

Also Read | What is no-poaching agreement?

December 6 – December 8, 2021

In a meeting held from December 6 to December 8, 2021, the rate-setting panel discussed the macroeconomic projections of RBI staff. Based on evaluation and assessment, the committee decided to keep the policy repo rate unchanged at 4.0%. The reverse repo rate also remained unchanged and the bank rate was kept unaltered at 4.25%.

October 6 – October 8, 2021

The MPC kept the policy repo rate unchanged at 4.00% while maintaining its accommodative stance to mitigate the impact of Covid-19 on the economy.

Also Read | Bank of England hikes key interest rate despite looming recession threat

August 4 – August 6, 2021

In the 30th MPC meeting, the Reserve Bank of India’s rate-setting panel announced that the policy repo rate would remain unchanged at 4.0%, along with the Bank Rate at 4.25%. The decision was announced to ensure that inflation remained within target.

June 2- June 4, 2021

The MPC kept the repo rate unchanged at 4.00% and the marginal standing facility rate was also unchanged at 4.25%. The MPC said it would achieve its medium-term target for the Consumer Price Index (CPI).

Also Read | How US Fed rate hike may hurt Indian economy

April 5- April 7, 2021

The MPC decided to keep the repo rate unchanged at 4.0% in the 28th meeting. The reverse repo rate was also unchanged at 3.35%. The objective of keeping the repo rate unchanged was to ensure economic growth amid the backdrop of the COVID-19 pandemic.