As expected, in the monetary policy meeting today, RBI has kept the repo rate unchanged at 4% while maintaining its accommodative stance due to uncertainty over the impact of the second wave of covid.
The Monetary Policy Committee (MPC) has decided to retain the prevailing repo rate at 4% and continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of covid-19 on the economy, while ensuring that inflation remains within its target.
RBI has also lowered its estimate for GDP growth to 9.5% for the current financial year from earlier 10.5% amid the second wave.
Commenting on the RBI policy, Sandeep Bagla, CEO Trust AMC said, “The policy bodes well for financial assets as well as the real economy, growth and employment as RBI has again stated its resolve to maintain conducive conditions to support durable growth. The policy is pragmatic, at the same time progressive and preemptive in its approach.”
Prithviraj Srinivas, Chief Economist, Axis Capital said that the move will help the economy remain stable despite the second wave. “Overall today's measures and communication by RBI bolster current accommodative policy stance.”
Avnish Jain Head of Fixed Income, Canara Robeco AMC said, “Near term markets will likely to trade in a narrow range on RBI support via open market operations / GSAP program. Global cues relating to commodities, rates and any change in policy stance of major central banks will likely drive sentiment as well".
