In a surprise move, the Monetary Policy Committee of the RBI announced a pause on repo rate, retaining it at 6.50%
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Apr 06, 2023
QuantEco Research || RBI Policy - Never say never
MPC decided to retain status quo on repo rate vs. consensus expectation of last round of 25 bps rate hike. The central bank tweaked its FY24 GDP growth and CPI inflation forecasts by +10 bps and -10 bps to 6.5% and 5.2% respectively. We continue to expect the central bank to lean towards gradual withdrawal of liquidity surplus to amplify monetary policy signals despite a pause on repo rate. We maintain our 10Y g-sec view of moderation towards 7.00% levels by end Mar-24.