First Capital Research believes that there is a 70 percent probability to hold policy rates due to the considerable improvement in high-frequency indicators and with fiscal and monetary measures implemented so far.
As per their view, the Central Bank either can choose to hold policy rates steady or cut by 25 bps or 50 bps while a hike is off the table due to the lackluster economic growth.
“However, there is a 15 probability each for 25 bps and 50 bps rate cut to support economic growth,” the First Capital Research said.
“Considering the reduction of SRR by 300 bps in two instances to 2 we expect SRR to remain unchanged at same levels.”
The Monetary Policy Review No. 02 of 2021 will be announced on Thursday, 04 March 2021 at 7.30 a.m.