INSUBCONTINENT EXCLUSIVE:
Inflation may be inching down, but the central bank is not ready to drop the guard against an expected price rise.
Raising the red flag over
an anticipated spike in prices in the near term, the Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel on Wednesday hiked
the benchmark interest rate by 25 basis points.
Interestingly, despite the fear of an inflation shock, the monetary policy stance has been
prices could also have a spiralling effect on inflation in the December quarter
The other factor to watch out is the impact of the hike in support prices for farmers.
The good news is that the GDP growth projection for
the current fiscal have been kept intact at 7.4%
On the rural front, the MPC says there are signals of a demand revival, as indicated by robust sales of tractors and two-wheelers.
However,
Here are some key takeaways:
PANEL VIEWV ANANTHA NAGESWARANINDEPENDENT CONSULTANT, VANSIGHT CONSULTING
The primary objective of rate hike
This is a pre-nuptial insurance that the RBI has taken out against dollar strength which could come because of Federal Reserve might end up
Today, they might not do anything on interest rates but Powell has spoken about a gradual rate increase for now
At one point of time they might increase rate by 50 bps and there could be some stampede for emerging markets in which case a rate buffer
would help as Indonesia and Philippines are doing.
MYTHILI BHUSNURMATHCONSULTING EDITOR, ET NOW
RBI has accepted and Viral Acharya admitted
will take time for the signal to be passed on through the system
IMF had recently lowered the estimate for growth for this year
would need to be cautious if oil prices are higher and currency is depreciating
At this point of time, you have to keep an eye on how Chinese currency is moving
RBI has done a good thing by hiking the rate
We are preparing for a pickup in investment cycle
We are looking at 7.4% growth.
KEKI M MISTRYVC, HDFC LTD
The macro-economic environment in India is not great
Oil prices and food prices are going up
We hear there is initial sign of pick up in investment cycle
Investments will continue to happen
The growth rate that RBI is projecting is achievable
It depends on so many factors
We have elections coming up
That will create uncertainty
