New Delhi, Feb. 21 -- The odds of a monetary policy rate hike are quite low given benign core inflation, according to ICICI Bank Global Markets. As a result, it said, it expects a prolonged pause going into 2026-27, with focus on injecting durable liquidity regularly to ensure monetary transmission remains in place.

The ICICI Bank Global Markets argued that any inflation upside shocks also seem unlikely, given the recent core inflation print in the new series. The recent increase in oil prices also works in favour of a rate pause.

The minutes of the monetary policy meeting that was held earlier this month showed that members expressed a more optimistic outlook on growth as reflected in various High Frequency Indicators and the recent tr...