By – Dr. POONAM TANDON, Chief Investment Officer IndiaFirst Life
“The Monetary Policy Commitee (MPC) has announced a 50bps repo rate cut and a 100bps cut on the CRR. This was quite unexpected by the market, which had pencilled in a 25bps repo rate cut. The RBI Governor has also mentioned that the stance of the monetary policy has been shifted from Accommodative to Neutral.
The MPC therefore front loaded the rate cuts and liquidity measures as well. This means that there will be a long pause and, therefore, no further rate cuts unless growth surprises on the downside. GDP has been maintained at 6.5%. CPI expectations moderated to 3.7% vs 4.0% earlier. Overall, the MPC has tried to accelerate monetary action for faster transmission.”
