InvestorQ : What is the expectation from the April Monetary Policy on the rates front?
indhumathi Sayani made post

What is the expectation from the April Monetary Policy on the rates front?

Answer
image
2 weeks ago
Follow

In the absence of any specific triggers, it does appear like a status quo monetary policy this time around. At least that is what the experts in the market seem to believe. Most analysts and economists are almost unanimous that the RBI would most likely maintain status quo on repo rates as well as its monetary stance when it announces its first monetary policy for the fiscal year 2021-22 on 07 April.

Due to the uncertainty generated by the second wave of the virus, the RBI may choose to wait longer before arriving at a decision on the rates front and even on the monetary policy stance. Dun & Bradstreet pointed out that long-term yields were hardening and this had led to rise in borrowing costs. On the one hand, the RBI had to manage rising inflationary pressures. However, on the other hand, they also had to keep borrowing costs in check.

For the time being, inflation is well within the 6% comfort zone of the central bank, there may not be any pressing need to tinker with rates. The RBI may continue to keep a hawk eye on core inflation, which has been moving up relentlessly. UBS is of the view that RBI would keep rates low and liquidity comfortable to see its own massive borrowing program to the tune of Rs.12,00,000 crore through.

4 Views