Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive summary:
- The key rate and effective rate are likely to remain unchanged at 13% and 18% respectively, though the NBH are expected to cut the O/N collateralised loan rate from 25%.
- Deputy Governor Virag said a “significant” narrowing of the interest rate corridor may be on the cards at this meeting in a shift from his usual hawkish rhetoric.
- Sell-side are unanimous in seeing a cut to the upper rate of 25%, with many analysts expecting easing of the effective rate to begin in May/June.
The key rate and effective rate are likely to remain unchanged at 13% and 18% respectively, though the NBH are expected to cut the O/N collateralised loan rate from 25% following a dovish interjection from Deputy Governor Virag, who said a “significant” narrowing of the interest rate corridor may be on the cards at this meeting. This raises considerable interest in the April meeting, as markets look for whether any first step on the corridor will mark the beginning of a protracting easing cycle.
Sell-side analysts are unanimous in seeing a cut to the upper rate of 25%, despite inflation remaining more persistent than expected – however the magnitude of such a cut is less clear. While Virag suggested a ‘significant’ narrowing in the corridor, estimates range from a cut of as small as 200bps, to as large as 700bps at this meeting.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.