RBI monetary policy review: Here’s what economists are betting on

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Updated: April 3, 2018 11:33:28 AM

The RBI will remain cautious and maintain a neutral policy stance, global brokerage UBS said.

RBI, government securities, bond losses, HFT, MTM provisions, news on rbi, latest news on rbi, bad loansThe Reserve Bank of India will come out with its next bi-monthly policy review on April 5. (Reuters)

The Reserve Bank of India will come out with its next bi-monthly policy review on April 5. In its last outing, the central bank had held rates. Therefore, it will be interesting to note what RBI announces this time considering the recent decline in inflation and improvement in economic indicators. Here’s what economists have to say:

UBS: The RBI will remain cautious and maintain a neutral policy stance, global brokerage UBS said. The monetary policy committee is expected to retain the repo rate at 6 percent, Economist, and Rohit Arora, Strategist, UBS investment Bank, told The Indian Express. The headline CPI inflation will rise over the next few months, UBS said.

CARE Ratings: The interest rates may not be eased this year, CARE Ratings said. The rate movements have been varied for the period of April to date, CARE said.

Kotak Mutual Fund: The upcoming meeting holds immense importance since it will show what the central bank has to offer and general market view is of an extended pause, The Indian Express reported citing Lakshmi Iyer, Chief Investment Officer, Kotak Mutual Fund. It will be interesting to see what is the reaction of the monetary policy committee to the recent cut in the borrowing programme of the government and its view on the fiscal will be of immense importance, she added.

The consumer price index (CPI) inflation has been projected to average 5.1 to 5.6 percent during the first half of the fiscal 2019 in its last outing. RBI Governor Urjit Patel in the last monetary policy review on February 7 had said “significant and postponed deviations” from them ongoing fiscal targets may make moving ahead difficult.

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