Financial sector players have said that Reserve Bank of India’s (RBI) decision for keeping the key repo rate unchanged is an accommodative approach to manage inflation while keeping growth as target, amid the current economic conditions, PTI reports.
“It also decided to continue with the accommodative stance of monetary policy as long as necessary at least during the current financial year and into the next year to revive growth on a durable basis and mitigate the impact of Covid-19, while ensuring that inflation remains within the target going forward,” Das said.
Abheek Barua, chief economist, HDFC Bank, said: “Given the stance, there is a significant probability of a rate cut in February, if not in December itself as inflation, as we expect, moderates. Has the RBI gone overboard in its effort to support growth? We think not.” Siddhartha Sanyal, chief economist and head research at Bandhan Bank said that the RBI has strongly conveyed their commitment to support growth recovery, even when the MPC’s hands were virtually tied in the policy as regards the policy rates. “The RBI’s assurance on maintaining comfortable liquidity conditions will assure the markets, at the same time enables the government to go ahead with its borrowing programme smoothly,” said Padmaja Chunduru, MD & CEO, Indian Bank.