In the current rate cycle, it said that rate actions, both hikes and cuts, have been largely synchronised with actions of the monetary authorities in the developed nations. The stance, the SBI report said could continue to be withdrawal of accommodation, even as liquidity is close to neutral.
"Even though the RBI could pause as it allows past rate actions to work with long and variable lags, the RBI could still guide the markets with a rate action in future that will be purely data dependent," it said. According to the report, 6.25 per cent repo rate could be the terminal rate for now. In its December monetary policy review, the central bank raised the key benchmark interest rate (repo) by 35 basis points (bps) after delivering three back-to-back increases of 50 bps.