RBI`s decision to pause the rate hike indicates its confidence in the persistent downward pressure on inflation Says Mohit Ralhan, TIW Capital
Below Quote on RBI MPC Announcement By Mr. Mohit Ralhan, Chief Executive Officer, TIW Capital
“RBI’s decision to pause the rate hike indicates its confidence in the persistent downward pressure on inflation. The expectation of record rabi foodgrains production, above-trend manufacturing production and moderation in commodity prices are crucial factors behind this pause. Having raised the benchmark rates already by 240 bps, it’s an opportune time to wait and watch the direction of the global economy before committing another rate hike or pivoting to a rate decline. Also, the full impact of the earlier rate hikes are still to be realized through the macroeconomic system, which RBI would like to assess before deciding on the next course of action. The challenges in the US banking system have also brought uncertainty on impending policy actions of the Fed necessitating the approach taken by RBI now. The good news is that the Indian economy remains resilient and the expected GDP growth of 7.0%, gives sufficient policy maneuvering room for RBI.”
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