Economic Survey remains to come later in the day as the reserve Bank reiterates that Fiscal Deficit needs to be watched and current account deficit remains high. RBI has also not made it clear any rate cuts are coming in the April meet a month away, markets taking it as a nbegative despite the consisteny of RBI and Government stance over 2012.
Bonds have ticked down to keep yields on target for a stab at 8.5% before the liquidiyty situation becomes clear. Policy speak includes a confirmatory nod on Economic improements in the US and a recognition of “SUPPRESSED INFLATION” in fuel and Food ( Read our Indian Inflation REport for details) Suppressed Infltn remains high in Power and Fertiliser and a recgnition of the downtick in Global commodities.
Rates remain unchanged in the 7.5 – 8.5 – 9.5 Corridor with MLF at 9.5 and rEverse Repors at 7.5
Other Economists consensus seems to indicate the 8.5 ratemay not go below 7-7.5% in the FY 2013 confirming that RBI can ill afford to disregard new minimums in global oil as Indian demand is inelastic to price straining government commitments to subsidy but not more than the fractured polity refusing exit from subsidies for the investment led return of infrastructure and GDP growth.