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Published on 31/07/2020 4:59:54 PM | Source: Kotak Mutual Fund

Pre-Monetary Policy View By Lakshmi Iyer, Kotak Mutual Fund

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Below is the Views On Pre-Monetary Policy View - Lakshmi Iyer, CIO (Debt) & Head Products, Kotak Mutual Fund

"This time MPC decision is likely to be caught between devil and deep sea. While the uncertainty on the economic front still persists, the Q1 CPI numbers have surprised on the upside. Also the trends in real rates, outlook going forward and supply disruption may warrant some caution. After 115 bps of rate cut, it may not be impossible to envisage a status quo on reverse repo rate (this the current operating rate) – though a pleasant surprise is definitely welcome. We do expect the accommodative rate bias to be the undertone of the policy. A dovish pause may bode well for markets as well and the comfortable liquidity could mean stability on bond yields notwithstanding small volatilities along the way."

 

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