The status quo on the repo rate front from Reserve Bank of India (RBI) is on the expected lines, according to A. K. Goel, Chairman, Indian Banks’ Association (IBA) & MD & CEO, Punjab National Bank.
“The GDP growth projection at 6.5% and retail inflation projection at 5.4% for FY24 were also kept unchanged by the RBI in this policy. Softening of the core inflation to 4.9% during July-August 2023 is a positive sign and would have given comfort to the RBI for keeping the status quo on its retail inflation projection for FY24,” he said.
“It has also been highlighted that the aim of the RBI is to bring the inflation to 4% and not only to keep it in the band of 2-6%, emphasising the focus of RBI is still on managing the inflation at the comfort zone,” he added.
Subhrakant Panda, President, Federation of Indian Chambers of Commerce & Industry (FICCI) while commenting on the monetary policy announcement said, “Inflation needs to be closely monitored, but it seems to have peaked and a correction in prices over the near term looks probable.”
“In line with the Monetary Policy Committee’s observation on recurring food-price shocks impacting both the inflation trajectory and its persistence, FICCI reiterates that de-risking food supply chains from weather- related disruptions should be a priority. This calls for a comprehensive roadmap and coordinated action at multiple levels,” added Mr. Panda.
Zarin Daruwala, Cluster CEO, India and South Asia markets (Bangladesh, Nepal and Sri Lanka), Standard Chartered Bank, said, “While the repo rate was left unchanged, the RBI remains vigilant on inflation and is ready to act if required. As the incremental cash reserve ratio (ICRR) unwinds, the core liquidity surplus will grow and could be mopped up through open market G-sec sales in the coming months.”