It is likely to keep policy rates on hold, maintain its accommodative stance going into FY22, and sound dovish amid rising Covid-19 cases
The policy, being the first in the fiscal year, could have many important policy measures spelled out
Overall policy focus will remain on supporting growth through low and stable interest rates and abundant liquidity
Earlier in December 2020, he raised exposure to Indian equities twice in this and reiterated his bullish on cyclical sectors as economic indicators showed improvement
Former RBI Governor Raghuram Rajan on Sunday cautioned that "drastic changes" in India's monetary policy framework can upset the bond market
The current inflation target has worked well
Even as the foreword of the report has been written by RBI governor Shaktikanta Das, the report is not the official view of the central bank
Internationalisation means the currency can be freely transacted by both resident and non-residents, and be used as a reserve currency for global trades
The government has ruled out tweaking the inflation target under the monetary agreement framework between it and the RBI
RBI Governor Shaktikanta Das, and Deputy Governors Michael Debabrata Patra and B P Kanungo spoke on a range of topics in a post-policy press meet
The Economic Survey, last week, had suggested that there should be one more round of AQR of banks after the Covid-related forbearance is over
Despite the fiscal activism in the Budget, the MPC stated that the recovery was yet to gain firm traction and needed continued policy support
Projection for CPI-based inflation revised to 5.2% for Q4 of FY21, for H1 of FY22 at 5% to 5.2%, and for Q3 of FY22 at 4.3%
The central bank had slashed the repo rate by 115 basis points since late March 2020 to support growth
Rise in interest rates could hit corporate earnings, hinder economic recovery
The MPC will keep the policy repo rate on hold, unanimously, despite the prospect of a drop in CPI inflation to 5 per cent in Q4 and then likely to average 4.5 per cent in FY22
We think the MPC could express its willingness to maintain the accommodative monetary stance at least till H1FY22, which should help sentiments
Beyond hype, if the Budget creates a platform for growth, the RBI will have to change the policy's stance, but that won't happen - now or even in April
The six-member MPC headed by RBI Governor is scheduled to meet for three days starting February 3. The resolution meeting would be announced on February 5