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As India grapples with the second of coronavirus pandemic, the Reserve Bank of India (RBI) is likely to keep the benchmark policy rates on hold when the board members meet on April 7, the latest survey of economists conducted by Bloomberg shows on Tuesday.

Key findings

“The six-member Monetary Policy Committee to keep the benchmark repurchase rate unchanged at 4% on April 7.”

“Traders will watch for an explicit forward guidance from the Reserve Bank of India on how long the policy stance will stay accommodative and liquidity abundant despite stubborn inflation.”

“Bond investors will be watching on how active the RBI is with its version of yield curve control and how long the accommodative monetary stance lasts.”

USD/INR licks its wounds

USD/INR fell on Monday, tracking the generalized weakness in the US dollar amid upbeat market mood-induced by stronger US ISM Services PMI.

At the press time, USD/INR trades at two-day lows of 73.26, modestly flat on the day. The cross hit fresh four-week highs at 73.63 last week.

The rebound in the rupee, however, appears limited as partial Lockdown in Mumbai may hit economic growth prospects.