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Below is the RBI MPC announcement reaction By Shri. Shanti Lal Jain, MD & CEO of Indian Bank.

“To rein-in the runaway inflation, the RBI raised the Policy rates by 50 bps.

 The CPI inflation continued to breach the RBI’s upper target range for the sixth straight month and remained above 7% for the third month in a row. Through this policy, RBI has brought in several measures including raising of policy rates by 50 bps so as to maintain price stability while keeping in mind the objective of growth.

The central bank has already started tightening the liquidity in the system along with withdrawal of accommodative stance in a calibrated manner. However, the domestic inflation, which has been mainly driven by supply side constraints, appears to have peaked off.

To allow Standalone Primary Dealers (SPD) to offer Forex services as AD category bank will strengthen the Forex market. Further, by permitting SPDs for Offshore Rupee OIS will remove the segmentation of domestic/offshore prices.

By enabling cross border inward bill payment system, ease and convenience of the NRIs will improve along with the forex inflow. Setting up a committee for removing the hurdles related to MIBOR will help in transition of MIBOR as an international alternate benchmark.”

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