Analysts at credit rating agencies have ruled out monetary easing at least in the next six months despite the Reserve Bank sounding optimistic on inflation and maintaining a neutral stance on its future policy moves.
Announcing the first bi-monthly policy for fiscal 2019, the central bank today left the policy rates unchanged at 6 per cent citing elevated inflation worries in the first half of the fiscal but a comfortable print in the second half.
"We expect the repo rate to remain unchanged over the next six months unless upside risks to the MPC's inflation forecast materialise," Crisil said in a post-policy note.
Icra also echoed similar views saying while the status quo in the policy in line with expectations, saying, "the balance of risks and outlook suggests a low likelihood of a change in the repo rate or monetary policy stance until there is greater clarity on the extent of impact of MSP hikes and the monsoons on the inflation trajectory, which is unlikely to emerge in the next few months."
However, India Ratings noted that the tone of the policy commentary suggests that despite several uncertainties surrounding the inflation trajectory, "RBI is not in a hurry to change its neutral stance but given the many uncertainties cited by RBI on inflation "we believe that RBI may remain in a pause mode in the near term so far as policy rate is concerned."