"Don't Expect A February Style Dovish RBI Policy": HDFC Bank
NDTV
HDFC Bank has indicated that markets could be in for a surprise if they expect the RBI to sing in line with the dovish tune delivered last time
As the Reserve Bank of India's (RBI) monetary policy committee is set to announce its decision on key rates tomorrow on April 8 and though there might be a consensus building to keep repo and reverse repo rates unchanged, HDFC Bank's treasury research team has indicated that markets could be in for a surprise if they expect the central bank to sing in line with the dovish tune delivered in the February policy.
In its note, the HDFC Bank research team has pointed out that the global as well as domestic outlook has undergone a significant change since the last RBI policy in February 2022.
"Geopolitical tensions and the increasing hawkishness from the US Fed has a bearing on everything from inflation to the rupee to yields. While it is true that there are countries that are deviating from the Fed's hawkish rhetoric - and India perhaps has some space to keep rates unchanged for now, but a prolonged deviation could be destabilising. We think its perhaps time that the RBI could start aligning itself with other major central banks. At least domestic conditions warrant or justify such a shift sooner than later," it noted.
HDFC Bank further said that inflation pressures are building, not only because of petrol and diesel prices climbing, but also due to higher transportation costs, which are feeding into prices of almost all other goods.
