Fitch Solutions sees RBI holding rates through FY22

Firm revises fiscal year inflation forecast to 5%, from 4.6%

Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy ₹1 lakh crore of government bonds. “We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. “However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields,” it said.