RBI May Keep Rates Unchanged As Record Covid Cases Threaten Economy

All economists surveyed by Bloomberg as of Monday expect the six-member Monetary Policy Committee to keep the benchmark repurchase rate unchanged at 4 per cent on April 7

India's monetary policy makers are poised to hold interest rates this week as the economy faces a renewed threat to growth from the pandemic, with new cases hitting a record. All economists surveyed by Bloomberg as of Monday expect the six-member Monetary Policy Committee to keep the benchmark repurchase rate unchanged at 4 per cent on April 7. Traders will watch for an explicit forward guidance from the Reserve Bank of India on how long the policy stance will stay accommodative and liquidity abundant despite stubborn inflation. Sticky underlying price pressures had earlier stoked expectations of policy normalization amid signs of a recovery in Asia's third-largest economy. But a partial lockdown in Maharashtra, which houses the financial hub of Mumbai and contributes about 15 per cent of national output, could likely skew forecasts. "The current state of affairs will ensure that RBI will not pull back accommodative measures in a hurry," said Teresa John, economist at Nirmal Bang Equities in Mumbai, who expects a status quo. Here's what to watch for in the MPC decision to be announced by Governor Shaktikanta Das in Mumbai on Wednesday morning: