The Monetary Policy Committee (MPC) constituted by the RBI will meet on April 05th and 06th to decide on the monetary policy stance going ahead. In the previous 2 monetary policy review of December and February, the RBI had opted to maintain status quo on rates. The question is whether the RBI may consider a rate cut of 25 basis points in its April policy. There are 7 key reasons why the RBI may choose to maintain status quo on rates in its April monetary policy review.
Why the RBI is unlikely to cut rates in its April 2017 policy…
In a nutshell, the RBI may choose to once again maintain status quo on repo rates. Indian markets and traders need to reconcile themselves to the fact that the consistently downward direction of rates in India may be a thing of history. With the world moving towards higher interest rates, India will have to move with the tide. Most likely, the RBI will maintain status quo on rates in its April policy and ensure that liquidity support to the market is maintained.
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