New Delhi, Feb 5 || The Reserve Bank of India (RBI) is likely to maintain status quo in the upcoming policy decision on Friday, as despite policy rate easing, government bond yields have exhibited persistent hardening in recent periods, among other reasons.
According to economists, the choice of eligible securities itself may influence the effectiveness of OMO operations, even when the aggregate quantum of liquidity injection is unchanged.
“We believe that the choice of eligible securities itself may influence the effectiveness of OMO operations, even when the aggregate quantum of liquidity injection is unchanged,” said an SBI Research report.
“RBI is thus likely to maintain status quo in the upcoming policy,” it added.
Since the last policy, one of the major policy changes is the EU-India and US-India trade deal resulting in reduction in tariffs on India to 18 per cent from 50 per cent earlier.
Clearly, India has now one of the lowest tariffs among Asian countries which will help in improving our export competitiveness, said SBI Research.