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The trajectory of inflation needs to be monitored before taking a monetary policy call by the Reserve Bank in 2026-27, with the Consumer Price Index (CPI) series set to come into effect soon, said SBI Research in a report.
The new CPI series with base year 2024 will be released on February 12, 2026, as per the government. The Ministry of Statistics and Programme Implementation is revising the base year of key macroeconomic indicators. Indicators such as CPI, GDP, and IIP play a vital role in policymaking in RBI. On Friday, the Monetary Policy Committee of the RBI unanimously decided to keep repo rate unchanged at 5.25 per cent. The MPC also maintained its neutral stance. Taking into account factors like GST rationalisation, healthy rabi prospects, benign inflation environment, the GDP growth outlook has been revised to 6.9 per cent in Q1 2026-27 and 7 per cent in Q2 2026-27. Retail or CPI-based inflation for 2025-26 is projected at 2.1 per cent with Q4 CPI at 3.2 per cent. The slight upward revision in the 2025-26 projection is due to an increase in prices of precious metals. The rupee also rose significantly following yesterday's policy announcements. "This was again unexpected. It may be again a better option for RBI to recoup dollars when the rupee has appreciated below 90," SBI Research suggested. The RBI often intervenes by managing liquidity, including selling dollars, to prevent a steep depreciation of the rupee. The RBI strategically buys dollars when the rupee is strong and ideally sells when it weakens. On the regulatory front, the RBI yesterday focused on reforming current practices on cross-selling, loan recovery methods using agents, and a framework for compensation in cases of small-value fraudulent transactions. A Discussion Paper to curb fraud in digital payments will explore the implementation of calibrated safeguards, such as lagged credits. According to SBI Research, the number of banking frauds has increased from 13,494 in 2022-23 to 23,879 in 2024-25. RBI has permitted lending to REITs in line with InvITs. Banks can now lend to the projects in the operational phase through REITs or can take equity. "This provision is positive development and furthers Budget announcement for monetizing CPSE assets through REIT structure and flow of fund to the sector," SBI Research report asserted. In another major announcement, the RBI has decided to enhance the limit of collateral-free loans to MSEs from Rs 10 lakh to Rs 20 lakh. (ANI)
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