“The RBI is most likely to maintain status quo on rates as well as stance this time. The high growth witnessed in Q2 in GDP will provide assurance that the economy is on track. The low core inflation numbers in the last few months will provide comfort that there is no need to increase rates even while headline inflation is likely to be volatile in the upward direction. Some direction on liquidity will be useful to the market as the system is in deficit for quite some time. There can be some upward revision in the GDP growth numbers though will not be very significant. We believe an upward revision of 0.1-0.2% can be expected here. Inflation forecasts may remain unchanged and, if at all there is a revision, will be upwards.”– Madan Sabnavis, Chief Economist, Bank of Baroda.
