Expectations from RBI policy: BOB Economic Research

7 Feb 2022 , 12:05 PM

Given the assurance on growth as per the budget and the possibility of inflation rising mainly due to crude oil, we expect the RBI to start the process of normalization by increasing the reverse repo rate by 25 bps. There will be no change in the repo rate this time even though we expect 50 bps hike next year. There could be a slight downward revision in the GDP growth rate for FY22. Will there be a change in stance? Probably not this time thought he hike in reverse repo rate will send signal of future direction of rates.

The author of this article is Jahnavi, Economist, Bank of Baroda

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