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Published on 5/10/2018 5:55:48 PM | Source: Kotak Mahindra Asset Management Company

RBI Monetary policy by Lakshmi Iyer - Kotak Mahindra Asset Management Company

Below is the views on monetary policy by Lakshmi Iyer, CIO (Debt) & Head of Products, Kotak Mahindra Asset Management Company

The MPC chose to stay on hold despite consensus view of a rate hike. The CPI targets were also lowered given the recent soft innings displayed on the inflation front. There has been an intent demonstrated to maintain liquidity in the banking system. However, we have seen a policy stance change from neutral to calibrated hikes signalling that rate cuts now are behind us. The lingering concerns seem to be around crude oil prices, global interest rates and the ongoing global developments on the trade front.  Given the status quo, we expect short term rates to ease while long term yields may trade range bound. The macro needs monitoring and INR and crude oil prices could be leading the way for markets going forward

 

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