RBI to shift its policy stance from accommodative to neutral - ING

Dhwani Mehta FXStreet

Analysts at ING Bank believe that the Reserve Bank of India (RBI) is likely to shift stance from accommodative to neutral in the next policy even though the rate-setting panel may refrain from cutting rates this year.

Key Quotes:

“We consider 7% GDP growth a pre-requisite for the RBI to unwind some of its recent policy easing. That’s not on our forecasting horizon out to 2021. A shift in the policy stance to neutral from accommodative is a reasonable starting point for the central bank's next policy meeting in early February.”

“On the fiscal front, the policy will remain accommodative but a wider budget deficit over the next few years won’t leave much room for fiscal maneuvering to support growth.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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