Quote on Pre RBI Policy by Sneha Pandey, Fund Manager- Fixed Income, Quantum AMC
Below the Quote on Pre RBI Policy by Sneha Pandey, Fund Manager- Fixed Income, Quantum AMC
The RBI may not move rates in October, but it may move the market’s expectations. The policy decision could remain unchanged even as the policy message becomes incrementally cautious.
Oil has displaced rate cuts as the dominant macro discussion.
Higher global yields can tighten financial conditions even before a domestic central bank changes rates.
Lower government borrowing is the quiet positive factor that the bond market should not overlook.
My base case is that the RBI will keep the repo rate and policy stance unchanged in October. However, its communication could become incrementally cautious as it assesses whether the combined effects of oil, food prices, global yields and currency pressures are beginning to influence broader inflation. The rate decision may remain unchanged, but the reaction function could become visibly hawkish
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