The Reserve Bank of India is likely to be optimistic on growth and economic recovery on the back of “faster-than-expected” sectoral improvements. “Moody’s upgrading India’s outlook and GST collections above 1 lakh crore for September and improvement in manufacturing PMI, all indicate at a recovery. This could trigger the discussion of again retargeting inflation instead of focusing on growth. Drawing the excess liquidity from the market could be used as first measure by increasing the reverse repo, instead of increasing the repo rate to tackle inflation. However this decision may not be taken in this meeting but would definitely be discussed. Action could be taken in the next meeting,” said Vijayasarathy
“Overall MPC is expected to take some more time before biting the bullet on tampering the rates. Before the next quarter, the action of USA federal reserve would also be evident and MPC could wait and watch and then react to it,” he further added.
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Source: News18