RBI MPC LIVE Updates: Key aspects that are likely to be considered in the policy meeting – CRR (3/5)
Slight rise in CRR: Although, it might not be a major agenda for this meet, but there is likely to be a slight rise in the cash reserve ratio (CRR) in the monetary policy, according to economists. “A gradual increase of CRR by 25 bps in the next policy meet can’t be ruled out, depending on the situation, going forward. The liquidity adjustment facility (LAF) corridor has been normalised. So, we don’t expect much change in this context,” stated Sankhanath Bandyopadhyay, Economist, Infomerics Ratings.
RBI MPC LIVE Updates: Key aspects that are likely to be considered in the policy meeting – Inflation (2/5)
Revised inflation target: The Inflationary Expectations Survey by the RBI reveals that 89.9 percent respondents in March 2022 believed that prices will increase, going forward, higher than the January 2022 estimate (85.6 percent). With CPI and WPI, both setting new highs last month, it is expected that the RBI will revise its inflation target to a more realistic number, i.e, beyond 6 percent for CPI as the ongoing Ukraine-Russia war impacts input costs, according to economists.
RBI MPC LIVE Updates: Key aspects that are likely to be considered in the policy meeting – Rate hike (1/5)
Rate hikes: Several economists said that the key rate would be hiked in the upcoming policy meet. While some expect it to range between 35 basis points (bps) to 50 bps, others see it in the 40-50 bps range. “We expect CPI inflation (to) average around 7.2-7.3 percent in H1 FY23 on account of elevated commodity prices, high food and core inflation,” said Swati Arora, Economist, HDFC Bank. According to economists, while controlling inflation is a priority now, RBI is also cautious in striking a balance between demand recovery and inflation control. “There will definitely be a rate repo hike. It could either be 40 bps or 50 bps,” added Sarbartho Mukherjee, Economist, Mahindra Group.
RBI MPC LIVE | Monetary policy decision today: What to expect?
According to economists, to tackle inflation, there will be further tightening in the monetary policy.
RBI monetary policy LIVE Updates | Anand Nevatia, Fund Manager at Trust Mutual Fund expects 35-50 bps rate hike along with hike in CRR to bring down liquidity.
Anand Nevatia, Fund Manager at Trust Mutual Fund, said that with RBI now prioritising inflation targeting over growth, “we expect 35-50 bps rate hike along with hike in CRR to bring down liquidity”.
RBI monetary policy LIVE Updates | “We expect the policy rate to go up by 35-50 bps. RBI is, however, likely to continuously provide liquidity support through the LAF window to sustain the growth process. It would provide support to the government borrowing programme while controlling the hardening of yield through policy twists,” credit rating agency Infomerics said.
RBI monetary policy LIVE Updates | Saransh Trehan, Managing Director of Trehan Group, opined that RBI is likely to increase the key policy rates by up to 50 basis points
RBI monetary policy LIVE Updates | RBI is expected to raise the policy rate by 25 bps: HDFC Bank Treasury Research Desk report
A report by HDFC Bank Treasury Research Desk said RBI is expected to raise the policy rate by 25 bps while continuing to keep its stance and the CRR rate unchanged.
RBI monetary policy LIVE Updates | The decision of the RBI Monetary Policy Committee (MPC) s scheduled to be announced at 10 am today
The decision of the RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC), which started its deliberations on Monday, is scheduled to be announced at 10 am today.
RBI monetary policy LIVE Updates | RBI raised repo rate or short term lending rate by 40 basis points last month
Last month, RBI raised the repo rate or short term lending rate by 40 basis points in an off-cycle monetary policy review to check spiralling inflation.
RBI monetary policy LIVE Updates | RBI likely to raise the benchmark lending rate by 25-50 basis points
The Reserve Bank of India (RBI) is likely to raise the benchmark lending rate by 25-50 basis points on Wednesday as inflation continues to remain above its comfort level, say experts.
RBI monetary policy LIVE Updates | “We think RBI may revise its inflation forecasts higher to 6.2-6.5 percent, with an emphasis on the risk of elevated near-term prints. However, we do expect the RBI to continue to predict a gradual decline in inflation over its forecast horizon,” said Rahul Bajoria, Barclays’ chief India economist.
