RBI Seen Holding Rates Steady As Virus Cases Mount: Poll

In a Reuters poll, 65 of 66 economists surveyed said the RBI's monetary policy committee (MPC) will leave rates unchanged

The Reserve Bank of India is widely expected to keep key interest steady on Wednesday amid a surge in Covid-19 cases in the country, but may revise its inflation projections higher. In a Reuters poll, 65 of 66 economists surveyed said the RBI's monetary policy committee (MPC) will leave rates unchanged. "We expect the MPC to come up with another dovish pause on Wednesday, especially with Covid-19 cases rising," said Indranil Sengupta, an economist at Bank of America Securities."The RBI's focus will remain on funding the rising fiscal deficit without pushing up yields to the point it hurts the (economic) recovery," he added. India reported a record rise in coronavirus infections on Monday, becoming only the second country after the United States to register more than 100,000 new cases in a day. However, several economists said they expect the central bank to raise its inflation forecasts amid a rise in global commodity prices particularly crude oil. The annual retail inflation rate rose to 5.03 per cent in February, a three-month high due to the rise in fuel prices "The April policy review is unlikely to see a significant shift in the RBI's guidance, while risks will be flagged but (may) not sound alarmist," said Radhika Rao, economist with DBS Bank.