RBI to maintain dovish pause in October – BofA

In the view of the economists at Bank of America (BofA), the Reserve Bank of India (RBI) is unlikely to make any changes to its monetary policy settings in October while maintaining a dovish stance.

Key quotes

“India’s lower-than-expected August inflation should give Monetary Policy Committee room to strike a dovish pause when it meets next month amid an economic rebound.”

MPC decision due on Oct.”

“India’s overall activity continued to improve in August after surprising on the positive side in July.

“While some indicators, such as railway freight, petrol demand and power generation, continued to do better than pre-pandemic levels, momentum in passenger vehicles, two-wheelers, tractor sales and diesel demand weakened.”

“Vaccinating critical mass of population continues to remain a tall task.”