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Below is Statement on RBI Monetary Policy By Dr Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital

Now the RBI has brought back the rates to "neutral"-the same level as before the pandemic. Similarly, the US Fed also views their current level as "neutral". A 50 bps raise after the US Fed's 75 bps raise can be viewed as, effectively, an interest rate cut on a relative basis. This shows the relative bias of the RBI towards supporting GDP growth while taming inflation, while the Fed is biased towards taming inflation while hoping that the GDP growth just slows down rather than slipping into a recession. Both are projecting a few quarters of rate increases beyond this level to tame inflation. RBI expects that inflation will be below its upper limit by Q4 FY23 while it does project a low GDP growth in both Q3 and Q4 but expecting it to rebound by Q1 FY24. Nominally, the GDP is likely to remain in double digits which bode well for corporate revenue and earnings growth. RBI remains fully in control and vigilant.

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