What do you make of the policy statement? Is this something that the market wanted to hear?
Undoubtedly this is what the market wanted to hear. To start, in a lighter vein, the RBI governor talked about faith and faith moves mountains. The market will keep faith in RBI’s ability to manage the current situation. Undoubtedly this is the policy where they have started the normalisation process, liquidity will be adequate but not in excess. The monetary policy will be less accommodative and hopefully with SDF, even though the reverse repo and repo rate corridor is maintained. It will probably result in the operating rate moving towards repo rate. So it is a policy which will give confidence to the market to keep faith in RBI.
