While the Monetary Policy Committee (MPC) of the RBI originally
was slated to meet in the first week of April, the central bank in a surprise
move is holding a briefing today.
The government
provided Rs 1.7 trillion package aimed at providing relief to the poor and
marginalized sections of society. Most experts have termed it as the first
tranche of the relief measures from the authorities and expect the Reserve
Bank of India (RBI) to follow it up with a cut in interest rates besides
announcing other liquidity support measures.
While the Monetary
Policy Committee (MPC) of the RBI originally was slated to meet in the
first week of April, the central bank in a surprise move is holding a briefing
today. Here is what leading brokerages expect from the central bank.
Brickwork
Ratings
In keeping with
the promise of the RBI Governor that the RBI will do whatever it takes, it is
reasonable to expect a sharp reduction in the borrowing costs. We expect the
RBI to continue with its liquidity infusing tools such as open market
operations (OMOs), forex swaps and long-term refinance options (LTROs), but
also to announce measures to support corporates suffering from business losses
due to the pandemic outbreak.
As the ongoing
slowdown will drastically impact the financial health of many sectors, we
expect the RBI to introduce forbearance measures towards the most affected or
stressed sectors, and extend the repayment schedule and moratorium, along with
implementing other measures, to avoid large NPAs and reduce risk weights. We
expect the RBI to continue with accommodative monetary policy actions and
stance; and cut the repo rate by 50 basis points.
Nomura
We believe the RBI
is running the risk of falling behind in terms of proactive policy
intervention, especially with the magnitude of shocks currently hitting the
Indian economy and the financial system. So far, the measures have been on
increasing domestic and dollar liquidity to ease financial conditions.
No comments:
Post a Comment