Quote on Market by Vaibhav Porwal, Co Founder, Dezerv
Below the Quote on Market by Vaibhav Porwal, Co Founder, Dezerv
" In the first Monetary Policy Committee (MPC) meeting after the Union Budget, the RBI announced a 25-basis-point reduction in the repo rate—from 6.50% to 6.25%—marking the first rate cut in nearly five years and the first policy revision in two years. This move is in line with our expectations and highlights the RBI’s efforts to balance inflation and economic growth.
Looking ahead, we anticipate gradual reduction in the interest rates in the next few MPC meetings. This rate cut is likely to benefit equity markets—particularly in high-leverage sectors like infrastructure, housing, financial services and banks. Bond markets, too, stand to gain from gradually declining yields. Short to Medium term bonds will tend to be more beneficial, as compared to long term bonds.
Dollar outflows pose a challenge to the currency markets and domestic liquidity over the next two to three months. RBI is expected to take prudent measures to tackle this problem, which will impact the effectiveness of the rate cut.
Overall, the MPC’s policy stance offers a supportive backdrop for economic expansion, even as the next meeting will be closely watched for further rate cuts."
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