Monetary policy panel may soften tone on rate, say economists

Economists expect the Reserve Bank of India’s monetary policy committee (MPC) to change its stance to “accommodative” in the next meeting, given that growth fell sharply to 6.1 per cent in the fourth quarter of FY17, when re-monetisation was believed to have gathered steam.

A rate cut is ruled out, owing to the excess liquidity sloshing around in the system. As such, say experts, it may not have the desired impact.

“I expect the MPC to change its stance to accommodative in the next meeting (on June 7),” says Soumya Kanti Ghosh, group chief economic advisor, State Bank of India. 

Others concur.

“Gross domestic