RBI Is Widely Expected To Keep The Policy Rate Unchanged
Raghuram Rajan is widely expected to keep the policy rate unchanged at the bi-monthly monetary policy review on Tuesday ahead of the Budget and amid global uncertainties, which are liable to trigger wild market swings. Most market participants expect the central bank to wait for more economic data before cutting rates further to spur growth, according to an ET poll of 15 financial institutions. Finance Minister Arun Jaitley will announce the Budget at the end of the month. At the ET Global Business Summit, FM Jaitley had said the Budget will focus on structural reforms but refused to be drawn into the debate between keeping the public spending spigot open and sticking to the fiscal deficit road map.
RBI is unlikely to cut rates, given the uncertainties emanating from volatile global financial markets, the US Fed’s policy action in March, the stance of the Union Budget’s fiscal consolidation and risk of food inflation post another deficient monsoon,” said Saugata Bhattacharya, chief economist, Axis Bank.