The Reserve Bank is likely to change the stance of its monetary policy and hike rates from the first quarter of 2022, a Japanese brokerage said on Monday.
The central bank will start with liquidity normalisation moves this month, narrowing the difference between the rate at which it funds the system and at which it absorbs excess liquidity in December, Nomura said.
It can be noted that the latest move by the Reserve Bank of India (RBI) last week to narrow the excess liquidity in the system through stated targets is being seen by some as the normalisation of the policy, which has been very accommodative since the onset of the pandemic to boost growth.
