IGI Logo

Below the Quote on RBI MPC  by Mr. Mahendra Kumar Jajoo, CIO Fixed Income at Mirae Asset Investment Managers

In line with the market consensus, MPC reduced key policy repo rate by 25 bps. Keeping in mind the prevalent volatile geopolitical situation, stance has been retained as neutral. Guidance seems to be of further rate cuts in coming quarters. While GDP growth forecast is at 6.7% for FY26, up marginally from 6.6% at the last meeting, inflation projections are revised downward to 4.5% vs 4.8% in previous review. Further there is strong guidance for providing adequate liquidity including injecting durable liquidity which typically indicates more open market purchase operations of dated securities. Thus, policy is a positive response to meaningful fiscal consolidation and guide path in the union budget and seems to set the tone for a deeper easing cycle and possibly more rate cuts to follow. Fixed income markets should witness further strengthening of ongoing momentum and bond yields are expected to ease further in coming months.

Above views are of the author and not of the website kindly read disclaimer