Will Omicron scare force RBI to maintain the status quo on rates?

 Covid-19 variant Omicron is making the global markets uncertain. So, what will the RBI do on Wednesday? Will it keep its gun powder dry, or will it pull the trigger by hiking rates? Let's find out

As global central banks fear being ‘behind the curve’ amid sticky inflation, India’s Reserve Bank of India is huddled up on Mint Street to discuss its bi-monthly policy.
The apex bank’s monetary policy outcome, which will be announced tomorrow, assumes importance as the US Federal Reserve no longer see inflation being ‘transitory’. That apart, economic uncertainties are also rising amid a new variant of coronavirus.
In a Business Standard poll of 16 economists and bond market experts, the consensus emerged of a status quo policy on the repo rate at four percent, and the stance being “accommodative”.
While six expected a sure hike in the reverse repo rate, 10 said the rise of the Omicron variant might not allow the RBI to do that.
One among the 10 said a reverse repo hike could be done outside the formal policy because it is at the sole discretion of the RBI and not the remit of the six-member monetary policy committee.
The significance of RBI governor Shaktikanta Das’s statement tomorrow will be the central bank’s outlook on economic recovery.
The RBI has, so far, refused to hike rates, stating that any hasty withdrawal would jeopardize the nascent recovery.
If the Omicron variant does not cause widespread disruption, economists expect the full-year growth expectation of the RBI, at 9.5 percent, to be met.