Likely to be pause for long

“In line with market expectations the MPC unanimously decided to keep the Repo rate unchanged and there was no change in the stance of “withdrawal of accommodation”. The policy highlighted the stable macros – inflation trending lower, Q4 FY’23 growth strong, narrowing trade deficit, fiscal deficit in control and demand and economic high frequency data showing strength. In this backdrop the central bank maintained the GDP growth estimate of 6.5% for FY’24 while lowering average inflation expectations to 5.1% ( from 5.2% ). The need to bring down inflation to the targeted 4% level was emphasized and  risks of inflation upside from Monsoons, geo political tensions, global financial market volatility and global growth deceleration were highlighted.

In all the RBI reiterated its “watchful stance”  to emerging risks and a commitment to maintain price stability and providing ample liquidity for economic growth. All this in the back drop of strong economic growth and lower inflation. Rates are likely to be pause for long unless there is any dramatic shift in inflation, growth or global volatility.”

• Ms. Shanti Ekambaram, Whole-time Director, Kotak Mahindra Bank