RBI Policy Reactions by Karvy Stock Broking and TIW Private Equity
Indian stock markets have taken RBI policy positively. Indian economy is facing minor challenges but majority of good companies have declared strong results. Stocks have witnessed decline in valuations but investors are cautious.
Comments on RBI Policy from Mr. Rajiv Singh, CEO, Karvy Stock Broking...
While we were hoping 50 bps rate cut, the RBI has chosen unconventional cut of 35bps which is mildly positive for the market. However, RBI cutting its estimation of GDP growth rate below 7%, while widely expected, may not go down well with the market in short term. Overall this is an accommodative policy and in tune with other developed and emerging market trends. Certain other macro prudential measures like enhancement of credit limit to individual NBFC to 20% from 15% of a Bank's Tier I capital is good.
The RBI has pointed out that while transmission of rates has occurred through money market, banks are yet to pass on the rate cuts to real economy. Overall, this is a good policy and should help improve liquidity, consumption and demand scenario in the economy albeit with a lag. We continue to expect further cuts from the RBI, as based on the current inflation projections, there is further room for RBI to cut rates and boost the economy.
Comments on RBI Policy by Mr. Mohit Rahlan, Managing Partner & CIO – TIW Private Equity.
The RBI policy stance clearly is pro growth. The measures taken to increase flows to NBFC is credit positive and will enhance lending. The policy stance has been retained as accommodative and the benign inflation outlook means one can expect more cuts in future.