Will 'Omicron' force RBI to delay policy normalisation?
Published On: Thursday, January 6, 2022 | By: Team KnowMyStock
Many economists are expecting RBI to delay the policy normalisation move, which is expected in the February review since COVID-19 infections spike in the country resulting in restrictions in various states and impacting the fragile recovery. The country has reported a single-day rise of 58,097 new COVID-19 cases as of Wednesday morning-the highest in around 199 days- of which 2,135 are Omicron cases and later in the day, the first confirmed Omicron-related death has also been reported. The active cases were recorded above 2 lakh after around 81 days and the COVID toll has climbed to 4,82,551 with 534 daily fatalities.
HDFC Bank chief economist Abheek Barua does not see the RBI-monetary policy committee (MPC) going ahead with the policy normalisaiton drive anytime soon, at least not in the next review in February as he expects the rising Omicron cases to shave 30 basis points off the March quarter GDP.
Similarly, Tanvee Gupta-Jain, the chief economist at UBS Securities India also expects the central bank to remain in “wait-and-see mode” for some more time.Echoing similar views, Icra Ratings chief economist Aditi Nayar said the Reserve Bank will remain in a hold mode for an extended time given the rising risks to fragile growth.
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