<p><em><strong>By Anup Roy & Subhadip Sircar</strong></em></p>.<p>The RBI will likely raise its inflation outlook to reflect costlier oil while leaving borrowing costs steady at this week’s meeting.</p>.<p>All economists surveyed by <em>Bloomberg </em>expect the RBI’s six-member monetary policy committee to hold the benchmark repurchase rate at 4 per cent on Friday, while just four out of 29 polled as of Thursday morning see a hike in the reverse repurchase rate -- a tool the RBI uses to remove excess cash from lenders.</p>.<p>That will shift the focus to any adjustments in language in the policy statement, as investors look for signs of normalising monetary settings. Here’s what to watch for in Governor Shaktikanta Das’s speech after the MPC meeting in Mumbai:</p>.<p>Investors will be looking for clarity on how the RBI - which acts as the government’s debt manager, in addition to its main role of maintaining price stability - plans to support the administration’s $189 billion debt program and keep the sovereign’s borrowing costs in check when faster global policy normalization is pushing yields higher.</p>.<p>Keeping a lid on costs is crucial for Prime Minister Narendra Modi’s government as it seeks to boost spending on infrastructure, creating jobs and increasing productivity in the economy. Das’s speech will also be closely watched for any change in language that signals a beginning of the end of the current easing bias.</p>.<p>Since October 2019, the central bank has said it will “continue with the accommodative stance as long as it is necessary to revive growth,” adding from March 2020 a reference to Covid-19.</p>.<p>“In the April meeting, we expect the RBI to raise its inflation forecast and prepare markets for future changes via a revised forward guidance,” said Pranjul Bhandari, chief India economist at HSBC Holdings Plc. “Rate changes will likely follow in subsequent meetings.”</p>.<p>With inflation already running above the central bank’s 6 per cent upper tolerance limit, the RBI is expected to bump up its 4.5 per cent inflation forecast for the current fiscal year to factor in risks from higher global food and energy prices due to the war in Ukraine.</p>.<p>The RBI will also adjust the growth forecast for this fiscal year, lowering it by a few notches to 7.5 per cent or more from the 7.8 per cent expansion seen in February, according to Ananth Narayan, a senior India analyst at Observatory Group.</p>.<p><strong>Watch the latest DH Videos here:</strong></p>
<p><em><strong>By Anup Roy & Subhadip Sircar</strong></em></p>.<p>The RBI will likely raise its inflation outlook to reflect costlier oil while leaving borrowing costs steady at this week’s meeting.</p>.<p>All economists surveyed by <em>Bloomberg </em>expect the RBI’s six-member monetary policy committee to hold the benchmark repurchase rate at 4 per cent on Friday, while just four out of 29 polled as of Thursday morning see a hike in the reverse repurchase rate -- a tool the RBI uses to remove excess cash from lenders.</p>.<p>That will shift the focus to any adjustments in language in the policy statement, as investors look for signs of normalising monetary settings. Here’s what to watch for in Governor Shaktikanta Das’s speech after the MPC meeting in Mumbai:</p>.<p>Investors will be looking for clarity on how the RBI - which acts as the government’s debt manager, in addition to its main role of maintaining price stability - plans to support the administration’s $189 billion debt program and keep the sovereign’s borrowing costs in check when faster global policy normalization is pushing yields higher.</p>.<p>Keeping a lid on costs is crucial for Prime Minister Narendra Modi’s government as it seeks to boost spending on infrastructure, creating jobs and increasing productivity in the economy. Das’s speech will also be closely watched for any change in language that signals a beginning of the end of the current easing bias.</p>.<p>Since October 2019, the central bank has said it will “continue with the accommodative stance as long as it is necessary to revive growth,” adding from March 2020 a reference to Covid-19.</p>.<p>“In the April meeting, we expect the RBI to raise its inflation forecast and prepare markets for future changes via a revised forward guidance,” said Pranjul Bhandari, chief India economist at HSBC Holdings Plc. “Rate changes will likely follow in subsequent meetings.”</p>.<p>With inflation already running above the central bank’s 6 per cent upper tolerance limit, the RBI is expected to bump up its 4.5 per cent inflation forecast for the current fiscal year to factor in risks from higher global food and energy prices due to the war in Ukraine.</p>.<p>The RBI will also adjust the growth forecast for this fiscal year, lowering it by a few notches to 7.5 per cent or more from the 7.8 per cent expansion seen in February, according to Ananth Narayan, a senior India analyst at Observatory Group.</p>.<p><strong>Watch the latest DH Videos here:</strong></p>