Today,we expect another day of wild swings with a negative bias as the bloodletting continues across global markets. The main focus of Indian market would be on the mid-term review of the monetary policy by the RBI. The central bank may not tinker with policy rates or the CRR/SLR given the fact that it has (along with the Government) already taken extraordinary steps to shore up liquidity in the local markets. These measures take time to work their way through the economy.
It is quite likely that the RBI Governor Duvvuri Subbarao and his colleagues at Mint Street will keep rates and CRR steady for now. Anyways, in the current unprecedented environment, the regulators are not waiting for scheduled meetings for making their moves. So, don’t be surprised if the RBI doesn't do anything today. But expect some more easing in interest rates and CRR over the next weeks if inflation continues to moderate. On the whole, we see a weak opening and another volatile day.
