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DH Poll: RBI likely to hold on to rates
The Reserve Bank of India (RBI) is likely to keep keypolicy rates unchanged in its February Monetary Policy Committee (MPC) meeting, that started on Tuesday.
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Markets open on a positive note ahead of the policy meet. BSE Sensex up 108.39 points. Broader index NSE Nifty up 23.45 points.
Even as RBI is expected to hold on to the key rates, its expected that the apex bank will change the outlook from 'calibrated tightening' to 'neutral', thereby making room for for rate cuts in April.
This time RBI is set to announce the MPC decision at 11:45 am, unlike earlier times, when it used to announce the decision only at 2.30 pm. This is the first meeting of MPC under governorship of Shaktikanta Das.
Interestingly, the CARE Ratings Debt Quality Index, which has come out just now, shows a degradation of 10 basis points to 90.82 in January. The rating agency takes a data set of 1,599 companies, with base year of 2012, to arrive at the debt quality index
In build-up to the MPC decision Indian Rupee has lost 7 paise, against US Dollar. Currently, the domestic currency is trading at 71.62 against the greenback.
Economists don't expect the central bank to tweak around with Cash Reserve Ratio (CRR).
Despite the consumption budget presented by Finance Minister Piyush Goyal, RBI is expected to hold on to rates as inflation is comfortable at present, in December dropping to an 18-month low of 2.19%, much below the RBI's outlook of 4%.
Markets going strong into the first policy meeting of the year. The market breadth is 2:1 in favour of advances, after being in negative territory for days.
On the GDP growth forecast front, RBI is expected to keep it unchanged.
RBI, in its last MPC meeting in December, had maintained its earlier prognosis of 7.4% growth of the Indian economy in 2018-19.
Bank Nifty up 69.85 points ahead of the first policy meet of the year.
RBI well justified for changing the stance to dovish, say experts
Contrary to expectations, RBI reduces the repo rate by 25 basis points.
RBI says MPC unanimously votes to change Policy stance to 'Neutral'
Rupee gains, bond yields fall after RBI cuts repo rate
RBI commentary benign on Budget. Says "Several proposals in the union budget for 2019-20 are likely to boost aggregate demand by raising disposable incomes, but the full effect of some of the measures is likely to materialise over a period of time"
Inflation target maintained at 6% by the RBI.
"It is surprise move. It would have great impact on markets. G-sec bond yields will immediately come down," says Madan Sabnavis, Chief Economist at CARE Ratings.
Post-budget, the bond yields had been going up, over concerns on fiscal position.
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