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Below is RBI Monetary Policy quote By Mr. Apurva Sheth, Head of Market Perspectives, Samco Securities.

This MPC announcement was considered a no-surprise event but the governor had other plans. Although the hike of 35 bps which takes the repo rate to 6.25% was broadly expected by the market, no change or even a little tweak in the stance came in as a big surprise. The RBI sounded as firm as it was in the last meeting about their stance of still being focused on the withdrawal of accommodation. Bringing down the inflation to its target of 4-6% remains RBI’s major focus. In fact, we believe by maintaining its stance RBI has dodged being in a box and will have the liberty to look at future data points to navigate its future course of action. Taking cues from the macro factors the RBI maintained its CPI targets at 6.7% for FY23. Going forward there could be a tug-of-war between declining inflation in India and rising interest rates by the US Fed – against this backdrop, it would be interesting to see how well the RBI would manage its repo rates.

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