Below is the Quote on RBI Monetary Policy Announcement by Murthy Nagarajan, Head-Fixed Income, Tata Mutual Fund
“RBI by increasing the OMO limits from Rs 10000 Crores to Rs 20000 Crores, it is also going to do State Development Loans OMO in the coming days to bring down the yield in that segment. It has allowed on tap borrowing for targeted long-term repo operations for cp, corporate bonds and even given loans to corporates. This should be beneficial for banks who are comfortable with the credits of corporates to on lend as banks borrowing rates are fixed, in case the repo rates are cut again, banks can re finance at lower rates also.
RBI has given everything which the markets have asked, and they have said they will look through these inflation numbers. The RBI also expects the current year GDP growth to be negative 9.5 % and the CPI inflation to come at its target of 4 % in the fourth quarter. These measures are extremely positive, and it should led to lower interest rates in the economy”.
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