“Though the decision to hold the policy rates was in line with the broader expectations, the commentary by the Governor has left several clues into the emerging scenarios, including the increasing inflationary pressures in the system, both internal and external, and the increasing inclination to suck out additional liquidity. However, the GDP growth forecast for FY24 at 6.5% is comforting, backed by robust domestic economic activity and strong consumption. A nascent revival in rural growth is most welcome as it will add to the resilience of the overall economy. As RBI continues to monitor price and financial stability, it may also have to keep a watch on Bond yields, equity markets, and the US dollar too.”
