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Below is quote on Monetary Policy by Murthy Nagarajan, Head - Fixed Income, Tata Mutual Fund

“RBI has lowered its GDP growth forecast to 7 % and CPI inflation has been maintained at 6.7 % for the current financial year. 67 % of the fall in forex reserves by 100 billion USD is due to revaluation effect. MPC maintains it stance of withdrawal of liquidity from the system. RBI refuses to state what could be the terminal repo rates and remain date dependent. Overall, the monetary policy is not as hawkish as market expected. Global adverse development has been acknowledged but RBI monetary policy stance is pre dominantly domestic driven. Rates market should take this positively and should trade in a range”.

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