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Below are Quote on RBI Policy Preview: No headline changes by Mr. Indranil Pan – Chief Economist, YES Bank.

RBI Policy Preview: No headline changes

* With the backdrop of growth related headwinds in both urban and rural sectors, increase in economic uncertainty, and rise in inflationary pressures, the RBI is expected to signal continuation of easy financial conditions and keep the repo and reverse repo rate unchanged.

* We do see a realistic chance for the RBI to reduce its earlier growth forecast of 10.5% and highlight increasing risks to the downside. Further, RBI will continue to pursue its broad intent of plugging weak spots in the economy and ensure adequate liquidity flows to various segments.

* The RBI is likely to announce the 3^rd tranche of g-sec purchase of INR 400 bn under G-SAP 1.0 and facilitate credit flows to businesses. While we see the possibility of more rounds of G-SAPs to be announced, we do not think that the RBI will do that immediately. Communication to the market will indicate clear inclination of the RBI to enable the system to absorb any additional supplies of government papers.

* The room available for traditional monetary policy is increasingly becoming constricted. In the absence of any further opportunity to cut rates, we expect the RBI to continue to use its balance sheet to keep financial market conditions easy.

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