The gap, which is 25 basis points (bps) during normal times, has widened to 65 bps since the onset of the Covid-19 pandemic
As the MPC signals normalisation, a key challenge for the RBI would be to ensure that even as sovereign yields rise, the move is orderly
RBI Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) is scheduled to announce the policy resolution on Thursday
Inflation may not be as transitory as has been estimated since rising demand will add to the supply bottlenecks
MPC's stance should remain accommodative till growth is secured, and future actions should be data-driven. But for now, reverse repo rate should be hiked by at least 20 bps
The high spirits on the budget were short-lived as the global concerns have began weighing on equities.
The meeting of the interest rate setting body, which was scheduled to start on Monday, will now begin on February 8
Conducting monetary policy will become more challenging
The key repo rate has been at 4 per cent since May 2020, an all-time low, even though bond yields have been heading north for many months now
15-40 bps raise likely in MPC meeting next week, say market participants
The Union Budget FY23's proposals will determine the trajectory of the Indian equities markets during the coming week
Budget 2022: ICRA expects a satus quo on the stance of the monetary policy as well as the reverse repo rate in the upcoming meeting of the Monetary Policy Committee.
Policy makers will stick to their resolve of keeping their stance easy to achieve the growth goal for now, said economists, including Standard Chartered Plc's Anubhuti Sahay
It is difficult to predict whether we will see a reverse repo rate hike in February or whether it will be held over until April
Repo rate unchanged at 4% and reverse repo at 3.35%
Govt action will be more important than monetary policy
The economy grew 8.4% in Q2, higher than the MPC's expectations of 7.9%
The Reserve Bank's decision to continue with its accommodative monetary policy stance would pave the way for a double-digit economic growth, said the industry and experts on Wednesday
The 5% tax rate broadly covers most food items, so an increase here would directly impact the monthly grocery budget of households
The committee held the lending rate, or the repo rate , at 4%. The reverse repo rate, or the key borrowing rate, was also maintained at 3.35%