Mumbai: Monetary Policy Committee (MPC) can go for up to 0.25 percent in an upside down level where the RBI absorbs excess liquidity and leaving the repo level where he lends, to narrow the polidor policy level, A British broker said on Thursday.
“Grawl worries amid the distribution of omicron variants and relatively benign inflation beyond providing RBI with sufficient space to maintain monetary policy that supports its growth,” Barclays analysts said, ahead of next week’s resolution announcement.
The RBI will climb the inverse repo level of 0.20-0.25 percent, given the actions of liquidity management, he said.
The broker joined the increasing list of observers expecting a reverse repo increase.
Other analysts also blame a surprising increase in government loans announced in the budget for the possibility of RBI requesting policy normalization.
Barclays said the focus of the budget on capital expenditure is expected to provide a fiscal impulse that was published on the economy and did not change the macro background, which included concerns on inflation.
On the increase in global oil prices, which generally played in domestic inflation through the increase in fuel prices accordingly locally, the broker said inflationary pressure could not rise before the state selection ended in March, signaling no pass-through.
Even though the inflation was tame lately, RBI needed to be vigilant, he said, pointing to his own estimate which suggested the title number that lived at the top of the band 2-6 percent and also the price of crude oil moved higher.
It is said until now, the Liquidity Signal of the RBI has diverse, which includes a shelf from the GSAP bond purchase program, a good increase in quantum and cut-off for auction repo repo repo voluntarily and several bond sales in the secondary market last month.
Policy guidelines will be dovish when compared to Global RBI colleagues who have guided or announced an increase in interest rates because inflation is a concern, he said, adding that inflation in India must reduce 2022.