Quote on RBI MPC Announcement by Sandeep Agarwal, CEO & CIO, Modulus Alternatives
Below the Quote on RBI MPC Announcement by Sandeep Agarwal, CEO & CIO, Modulus Alternatives
“The RBI’s 25 bps rate hike, taking the repo rate to 5.50%, marks an important shift in the interest-rate cycle. The move reflects the growing focus on inflation risks amid elevated crude prices, global yields and currency pressures, while India’s underlying growth momentum remains resilient.
For credit markets, the impact will extend beyond the immediate increase in borrowing costs. A higher-rate environment places greater emphasis on the quality of cash flows, debt-servicing capacity and the strength of the underlying security. For private credit, this reinforces the importance of disciplined underwriting and structuring, with greater selectivity around businesses that have sound fundamentals and clear visibility on repayment.
The more important signal from here will be the RBI’s forward guidance and whether this marks the beginning of a broader tightening cycle. For businesses and lenders alike, the ability to navigate the rate cycle with balance-sheet discipline will become increasingly important.”
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