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RBI’s Focus Will Remain On Yield Curve Management

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The focus of the Reserve Bank of India will remain on yield curve management, Motilal Oswal Institutional Equities has said in a report.

 

"The RBI's focus remains on growth revival and yield curve management. It also continues to announce new liquidity measures and extend some already announced measures; this implies that monetary policy normalization is not the priority at present. We believe the RBI may choose to monitor the cause of the evolving inflation situation and then decide accordingly," the firm said in a report.

According to Motilal Oswal Institutional Equities, although inflation forecasts were revised up only marginally to 5.1% in FY22, growth forecasts were revised down by 1pp to 9.5% (from 10.5% earlier) - on account of the increased spread of COVID infections in rural areas and dented demand in urban areas.

RBI’s Focus Will Remain On Yield Curve Management

"Overall, the monetary policy decision came on expected lines. The RBI's focus continues to be on growth revival and yield curve management. It also continues to announce new liquidity measures and extend some already announced measures, implying that monetary policy normalization is not its priority currently. We believe the RBI may choose to monitor the cause of the evolving inflation situation and then decide accordingly," the firm has said.

Read more about: rbi
Story first published: Monday, June 7, 2021, 11:02 [IST]
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