Expect RBI to keep accommodative stance at least till first half of FY22

We think the MPC could express its willingness to maintain the accommodative monetary stance at least till H1FY22, which should help sentiments

Topics
RBI | Budget 2021 | monetary policy

Kaushik Das 

With FY22 Union Budget announcing a higher-than-anticipated fiscal deficit target and market borrowing programme, bond market sentiments have soured, with 10-year government bond yield rising above the 6 per cent mark.

Against this backdrop, the upcoming monetary policy will gain importance, to ascertain the reaction function of the Reserve Bank of India. While the MPC is expected to maintain the status quo on the rates front, the focus will be primarily on three factors: i) till what time period the MPC will want to maintain its guidance of accommodative stance; ii) how actively the ...

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First Published: Wed, February 03 2021. 06:10 IST
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