The monetary policy committee (MPC) of the Reserve Bank of India (RBI) is likely to pause the repo rate as inflation in the country dips, said the State Bank of India (SBI) on Monday.
The bank in a report said that the stance could continue to be withdrawal of accommodation, as liquidity has turned into significant surplus mode.
"We believe at 6.50 per cent, we are in for a prolonged pause," added SBI.
It stated that the RBI could make a tactical shift in forward market intervention to sell buy swaps… neutralise liquidity and allow.
The report mentioned that the Indian rupee is to find its own level of USD 12 billion forward maturity in a three to 12 months bucket.
Frontloaded rate actions by RBI has resulted in frontloading inflation trajectory and Inflation data till October would be decisively below five per cent.
October inflation print to be known to RBI in December policy indicating pause through 2023 and Inflation estimates for FY24 could be downgraded in June policy, it added.
Talking about the growth, the SBI report added that it remains strong and the possibility of a growth upgrade for FY24 looks imminent.