IGI Logo

Below On RBI MPC announcement By Mr. Piyush Baranwal, Sr. Fund Manager, WhiteOak Capital Asset Management Ltd

“RBI’s policy announcement today was a continuation from the previous meeting and can be compared to Sinhavalokan, where MPC, like the proverbial lion, pauses and looks back to better assess the ground it has covered thus far. While CPI has eased to below RBI’s upper tolerance limit of 6%, Governor Das’s repeated emphasis of 4% target were likely aimed at preventing financial conditions from easing prematurely thus hindering the disinflation process while also providing RBI flexibility to react to global developments as required. If domestic CPI trajectory broadly proceeds along RBI’s projections, we believe that repo rate at 6.5% should provide sufficient disinflationary force to nudge inflation towards RBI’s target level. We are thus likely in a phase of prolonged pause for now.”

Above views are of the author and not of the website kindly read disclaimer