RBI may not go for any rate-cut in current year
The RBI’s stance is likely to remain accommodative for current calendar year and there was no likelihood of any rate cut by the apex bank, says a report by Tata Mutual Fund.
RBI likely to retain accommodative stance
Mumbai, Mar 27 The RBI's stance is likely to remain accommodative for current calendar year and there was no likelihood of any rate cut by the apex bank, says a report by Tata Mutual Fund.
RBI will continue with OMO purchases of G-Sec and SDLs, whereas Yield curve to inch-up generally and witness bear steepening (longer term yields rising faster than shorter term yields).
Moreover, RBI is likely to gradually return to a normal Monetary Policy. Rather, the apex bank is expected to act to remove abundant surplus liquidity, however, liquidity is likely to remain positive, the report says.
RBI is likely to conduct reverse rate repos, hike CRR and take a neutral policy stance through FY22
Coming on CPI, the study says that CPI for the month of February rose sharply to 5.03 per cent YoY against 4.06 per cent YoY in January on account of broad-based increase across food, fuel and core categories.
Food inflation inched up by 4.25 pe cent YoY in February against 2.67 per cent YoY in January. On a sequential basis, food momentum contracted by 0.44 per cent in February versus sharp contraction of 2.11 per cent in January.
The sequential correction in food prices was primarily led by Eggs (-3.54 per cent), Vegetables (-3.50 per cent) and Meat & Fish (-1.01 per cent). Consolidated fuel inflation rose by 6.96 per cent YoY in Feb-21 from 5.67 per cent in January. On sequential basis, it increased by 2.03 per cent in February from 1.53 per cent in January led by sharp rise in petrol and diesel prices.
