Madan Sabnavis, Chief Economist, Bank of Baroda, stated
“The policy was on expected lines with status quo on rate and stance. Interestingly GDP growth is projected at 6.9% and inflation at 4.6%. This virtually indicates few chances of any further rate cuts as RBI has flagged El Nino as a risk to inflation too. The view on economic prospects is balanced and indicates resilience to a large extent. The RBI has reiterated that its exchange rate policy remains unchanged, which should reassure markets. As the policy comes after the cease fire was announced, all markets – stocks, currency and bonds – have shown a positive reaction. We expect a long pause until clarity emerges on various fronts.” that its exchange rate policy remains unchanged, which should reassure markets. As the policy comes after the cease fire was announced, all markets – stocks, currency and bonds – have shown a positive reaction. We expect a long pause until clarity emerges on various fronts.”
