RBI to retain liquidity focus for rate tansmission
The Economic Times [
Mumbai
]
Apr 8, 2025 | Page No.: 16 | Position: Middle Left | Source: Alekh Angre, Rozebud Gonsalves | Sq Cm: 182 | AVE: 489750 | PR Value: 2448750
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Central bank s move also likely to insulate market amid equity and bond outflows RBI to Retain Liquidity Focus for Rate Transmission rate and ensure effective transmis- most elaborate since the 1930 Smoot- call rate WACR which indicates cy experts achieve that objective Alekh Angre Rozebud Gonsalves sion of rate easing in the cycle Gold- Hawley Tariff Act have caused more banks overnight cost of borrowing It may look like that while the ove- man Sachs said in a report than 2 trillion in market-cap losses closed at 6 16 on Monday nine basis rall growth story looks good there Mtunbal India s central bank is ex- The Monetary Policy Committee across the globe causing some east points below the current repo rate of are some pockets that pertain to indu- pected to boost the availability of MPC is scheduled to announce its Asian equity indices to lose the most 6 25 due to surplus liquidity condi- stries sort of oriented toward the US funds for effective and rapid- rate decision on Wednesday having in nearly three decades tions in the banking system which can face some setbacks said -transmission of policy rate action slashed the policy rates for the first ti- Banking sector liquidi- Between December 2024 and April 7 Madan Sabnavis chief economist at as Mint Road seeks to steer Asia s me in nearly five years by a quarter ty has improved with a 2025 the RI31 has infused durable li- Bank of Baroda Therefore there is third-biggest economy through the percentage point two months ago An surplus of around t1 quidity which is permanent and a reason to lower the repo rate which rubble of tariffs-ravaged global mar- ET poll showed participants expect lakh crore compared long-term in nature of Z6 4 lakh cro- will send a strong signal that the cen- kets with minimal damage to growth another quarter-percentage point re- with a deficit seen in the re Another z60 000 crore is expected tral bank would also like the trans- and domestic consumption demand duction in rates this week taking the past three months mainly on the through the remainder of April mission to take place We expect the Reserve Bank of In- repo rate to 6 back of a raft of central bank funds- To be sure economists believe a The next significant infusion will dia to actively manage liquidity con- Last week The US slapped 26 ta- infusion measures including forex further policy rate reduction will sig- come from the central bank s divi- ditions via short-term liquidity mea- riffs on India a move that is likely to swaps and open market operations to nal the need for boosting transmis- dend transfer in May expected to be sures to ensure that the overnight ra- potentially alter growth and inflation buy government bonds sion efficiency and adequate liquidi- t2 6 lakh crore said Gaura Sen Gup- tes keep trading at or below the repo dynamics The levies arguably the Consequently the weighted average ty in the system should help the poli- ta chief economist IDFC First Bank