Expect MPC to remain vigilant on potential upside risks in Apr 4-5 meet

A wait-and-watch stance by the MPC will also support the government bonds market

The Monetary Policy Committee (MPC) meeting on April 4-5 is unlikely to throw any surprises. A status quo on repo rate at 6 per cent, reiteration of a neutral stance, and a balanced tone of the policy statement is widely expected. This is so, as (i) the macro environment has not changed significantly since the last policy meeting in February, and (ii) clarity on potential risks to inflation or growth as highlighted in the previous policy meeting are still awaited. 

For instance, even though we expect the MPC to significantly undershoot its consumer price index (CPI) inflation projection by 50-60 basis