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Below Views on RBI policy By Mr Anand Varadarajan, Director, Acit C Mehta Investment Intermediates Ltd

The Reserve Bank of India has kept the repo rate unchanged at 6.5% in its policy meeting today. In the current financial year, the RBI has increased repo rate from 4.0% to 6.5%, however, the pace of rate reduced from 50 bps to 35 bps in its last meeting and to zero today. Thus, signalling that we are near the end of the rate hike cycle.

The market was expecting a 25 bps hike, however, the RBI has chosen to boost growth over curtailing inflation. It has also made a marginal upward revision to its FY24 growth forecast from 6.4% to 6.5%. Even the inflation forecast for next year has been reduced to 5.2% from 5.3% earlier. However, it said the fight with inflation is far from over till it sees a meaningful correction.

This move is expected to be positive for the economy and markets in general and particularly for rate sensitive sectors like Banking & Finance, Auto, Consumer Durables, Real Estate, Infra, etc.

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