What to expect from RBI's monetary policy announcements on Friday? Expert Ajay Bagga expects this!

The Reserve Bank of India (RBI) will announce the first monetary policy of the new financial year on Friday. What will be special in tomorrow's RBI credit policy? Where will the focus be in the RBI Governor's commentary? How likely is the interest rate hike? Market Expert Ajay Bagga explained.

Bagga believes that there will be no change in rates and policy tomorrow. Inflation has definitely increased but the reason for its rise is the supply side. In cost-push inflation, even if rates increase, it will bring down the economy, he said.

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Shaktikanta Das is one of the best RBI governor. He took the reins in very difficult times and is taking India out of crisis very well, he added.

Talking about the outlook of RBI Credit Policy, Bagga said there will be no change in policy tomorrow, but there is a possibility of an increase in the inflation forecast as well as a slight fall in the growth forecast. It cannot be denied that there has been an increase in uncertainty and there is a big crisis in India due to oil prices.

Still, looking at its positive points, the tax collection has increased very fast, he reminded. The collections of GST, Corporate Tax, and Direct Tax have all increased very rapidly. Also, the physical deficit of the government is under control. And this is the expectation that it will come a little better than what it had budgeted because tax has increased and capex, in particular, has been withheld a bit.

So overall Bagga believes that nothing will change in tomorrow's policy. Uncertainty is definitely there and maybe a change in policy will be announced in June. By May, the results of the US will come too, which will also give some clarity.

He further said the ECB's chief economist also said in yesterday's speech that inflation would begin to ease by the end of the year on the base effect and commodity shortages generated from the Russia and Ukraine conflict.

And I also think the same approach will be taken by the RBI, Bagga said, and till the LIC IPO is about to come, the government or the RBI will not do anything that will shock the market.

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कल की RBI क्रेडिट पॉलिसी में क्या होगा सबसे खास?

RBI गवर्नर की कमेंट्री में कहां पर रहेगा फोकस?

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RBI क्रेडिट पॉलिसी का Outlook अजय बग्गा से...@Ajay_Bagga @AnilSinghvi_ #RBIPolicy #CreditPolicy #MonetaryPolicy pic.twitter.com/IvvnBEqWXs

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