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Chief Economist Abheek Barua reacts over RBI monetary policy

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KASHMIR NEWS TRUST #KNT

Reacting over the monetary policy of RBI, Chief Economist HDFC Bank Abheek Barua has said that a status quo policy was delivered by the central bank today, keeping both the policy rate and stance unchanged.

The RBI continued to be rather upbeat on growth, revising up its Q1 growth forecast to 8%, while retaining its annual forecast at 6.5% which is higher than our estimate of 6-6.2%. The central bank lowered its inflation forecast only marginally to 5.1% and seems to be building in a buffer for any food price spikes due to weather-related disturbances during the monsoon season. If indeed these risks do not pan out, inflation could be lower than the RBI’s projections leading to subsequent communications becoming more dovish.

“Today’s policy decision does little to move the needle in the bond market as it was broadly in line with expectations. Any rate cut expectations in 2023 that were being built up in the market are likely to be pushed forward for now.” [KNT]

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