How Omicron Will Affect India's Interest Rates - What Experts Say
NDTV
The Reserve Bank of India will likely keep its key lending rate at a record low for a ninth straight meeting, with a new virus variant seen as the latest threat to the central banks efforts to return policy to normal.
New Delhi: The Reserve Bank of India will likely keep its key lending rate at a record low for a ninth straight meeting, with a new virus variant seen as the latest threat to the central bank's efforts to return policy to normal.
All 28 economists surveyed by Bloomberg as of Monday expect the six-member monetary policy committee to leave the repurchase rate unchanged at 4% on Wednesday. Even bets on the reverse repurchase rate -- the level at which the RBI absorbs cash from banks -- are heavily skewed toward a hold, underlining the difficulty it faces in containing price pressures while supporting economic growth.
“Since the pandemic, the RBI has done exactly this balancing act, and the pandemic is not yet over,” said Soumya Kanti Ghosh, chief economist at State Bank of India, the country's biggest state-run lender. “Against this background, delaying normalization measures is prudent in the current situation.”
Governor Shaktikanta Das is scheduled to announce the MPC's decision through a webcast at 10 a.m. in Mumbai on Wednesday. Here's what else to watch for in his speech:
