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Below are Views On RBI Monetary Policy Committee's announcement by Prof. Krupesh Thakkar, CFA, HoD - Financial Markets, ITM B-School

“On the outset of a balanced budget, RBI was expected to continue its accommodative stance and so has happened. More than the expected status quo rates, the economy outlook and the structural announcements have been encouraging. RBI has clearly stated that the need of the hour is to support growth and also its outlook of growth has improved.  Accordingly, it has pegged FY22 growth to be 10.5%. On the other hand, on the inflation front, RBI seemed comfortable with risks to inflation being in balance now though cost-push pressures can provide upward pressure. Having said that, it has kept CPI target at 5.2% for March 2021 and 4.3% in Dec 2021. To accommodate the government borrowings, markets were expecting the OMO calendar which, at this moment, they refrain from announcing.  However, the restoration of CRR to 3.5% in March 2021 and 4% in May 2021 will surely provide more room for RBI’s further measures on above. Another, revolutionary step is to allow more retail participation in G-Sec markets.

Overall, RBI’s assurance to be supportive for  liquidity management and the growth as long as required are being  cherished by all including the markets.”

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