RBI to hold rates, may sound confident of reaching inflation target: Report

The Reserve Bank is expected to hold its key rates at the forthcoming policy review, but may sound more confident about reaching its 4 per cent inflation objective, a foreign brokerage said on Wednesday. The rate-setting panel may prefer to stick to the 'withdrawal of accommodation' stance of the monetary policy, HSBC said in the report on the eve of the RBI MPC's decision. "While it's a close call, we also think the policy stance will remain unchanged, even as the RBI sounds more confident than before about getting to its 4 per cent inflation target," it said, listing out the aspects it will watch out for in the document or the resolution. These include any softness in tone around increased confidence of getting to 4 per cent inflation durably, or a change in growth or inflation forecasts, and, further commentary around the use of OMO (open market operations) sales to take out excess liquidity. In the background of another member dissenting at the last policy review, the brokerage
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