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Below Quote on Monetary Policy By Rohan Juneja, Managing Director & Chief Executive Officer, TruCap Finance Limited

The RBI monetary policy committee (MPC) has taken a pause on interest rate hikes which appears to be a prudent step, in our view. Though it has termed it as 'temporary' and retained its stance at 'withdrawal of accomodation' , the development is a positive for most sectors.

RBI has highlighted that the war with inflation is not yet over and the MPC will be ready to take any further hike in rates if the concerns on inflation increase further. RBI has not made any significant modifications to its existing forecasts on growth (6.5%) and retail inflation (5.2%) for FY24.

A robust rabi crop may likely ease the pressure on inflation but the potential risk of food inflation has been highlighted by the Central bank given uncertainty on the current year’s monsoon along with significant likelihood of core inflation levels above 6% in the near term due to resilient domestic demand.

The pause in the rate cycle, however, will be positive in the near term for most sectors. Going forward, progress on the monsoon season and banking sector events in the US and Europe will be key in determining the trajectory of interest rates."

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