Since no rate action is anticipated, Thursday’s RBI meeting won’t be significant for D-Street.

Since the Reserve Bank of India (RBI) is not expected to change interest rates, the off-cycle meeting that is scheduled for Thursday is expected to have little impact on the equity, bond, and currency markets.

The primary purpose of the central bank meeting is to deliberate and draught a justification for the government regarding the inability to fulfil the inflation target for three consecutive quarters.

Furthermore, no one will know what was discussed at the meeting because the central bank is not anticipated to issue a formal statement.

The letter cannot be made public, according to Governor Shaktikanta Das, who was speaking at a banking summit on Wednesday.

Domestic consumer price inflation averaged 6.3% from January to March, 7.3% from April to June, and 7.0% from July to September, all exceeding the RBI’s goal range of 2-6%, demonstrating the central bank’s failure to control inflation.

According to Rahul Chander, MD and CEO of LivFin, a fintech non-bank finance company, despite coming a day after the Federal Reserve’s policy decision, and as unseasonal rains that have damaged crops intensify the inflationary pressure on the Indian economy, the RBI’s Monetary Policy Committee’s unscheduled meeting this week is unlikely to spring a surprise with an off-cycle rate hike.

It is common knowledge that the central bank will evaluate the reasons why the goal wasn’t met. The Parliament will get the explanation letter, which can be discussed in the winter session.

Prices on Wednesday reflected caution in both the equity and money markets, but this was mostly due to investors’ anticipation of the US Federal Reserve’s policy decision and prognosis on future rate hikes later today.

It is widely anticipated that the central financial institution will list the factors that contributed to the failure to achieve the objective. The Parliament will get the explanation, which may be referred to throughout the winter session.

On Wednesday, caution predominated in both the equity and cash markets, which was reflected in prices, but this was mainly because traders worldwide are expecting the US Fed’s policy decision and perspective on future rate hikes later today.