Halister News

(Bloomberg) -- Deutsche Bank has “more conviction” that RBI will likely continue to do OMO purchases regularly in next fiscal year, economists Taimur Baig and Kaushik Das write in report dated March 18.

• Estimates OMO purchases amounting to 600b-1t rupees ($9b- $15b) in total for fiscal 2017
• Says RBI will justify OMOs as a tool to manage liquidity more effectively, though such actions can also be perceived as concerted effort on part of central bank to prevent long- term yields from rising further
• Expects RBI to cut its policy rate by 25 bps on April 5 and to provide guidance that further accommodation could be considered if inflation pressures remain at bay
• While there’s market chatter about possible CRR cut, Deutsche notes that this expectation is persistent feature before each meeting, with RBI having disappointed each time, underplaying importance of a CRR cut in driving lending rates lower