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Below are views on the Monetary Policy announced by the RBI earlier today by Mr. Dhiraj Relli, MD & CEO, HDFC securities

To preserve lives and livelihoods and prevent a resurgence in new waves of infections - policy support from all sides – fiscal, monetary and sectoral – is being provided to nurture recovery and expedite return to normalcy. RBI’s MPC decided to retain the rates and continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis.  MPC also whittled down macroeconomic growth numbers and upped its inflation projections, completely in line with market expectations.  It gives added credibility to RBI’s ability to navigate the country during difficult times.

Relief given to contact intensive industries - special liquidity facility to SDBI for on-lending to MSMEs and enhancing the exposure thresholds under resolution framework augers well to support growth impulses from those severely affected sectors. An increase in the quantum of secondary market purchases under G-SAP 2.0 will keep benchmark yields anchored around 6% levels. Overall, monetary policy is on expected lines and has checked all boxes.

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