Quote on MPC Rate hike : RBI should take this policy stance forward by continuing the pause in the June policy Says Dr. V K Vijayakumar, Geojit Financial Services
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Quote On MPC Rate hike effect on Indian Markets 19th May 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
The MPC decision in April to pause the rate hike has been proved right by the dip in inflation. CPI inflation declining to 4.7% in April and the WPI inflation dipping into negative territory, the lowest in the last 34 months, has proved that the RBI was right in prioritising growth over inflation control. RBI should take this policy stance forward by continuing the pause in the June policy meet and explore the possibility of cutting rates by end 2023.
The global backdrop also is turning favourable since the Fed might pause soon, perhaps after one more last 25 bp hike in the next meet. The Fed is no longer saying that “additional rate hikes would be appropriate.”
The evolving monetary policy stance of the Fed and the RBI are slowly turning favourable for growth. This augurs well for India’s growth in FY24 and, therefore, is good for markets too.
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