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Top three key risks for markets from RBI policy: Update

Top three key risks for markets from RBI policy: Update

Top three key risks for markets from RBI policy: Update

Mumbai: The Reserve Bank of India (RBI) is not going to oblige anytime soon. Despite economists claiming otherwise, the RBI is going to keep its benchmark interest rate on hold at 7.50 percent and there is going to be no change in India’s bankers’ bank.

On the other hand the Reserve Bank of India has made it apparently clear that it is not averse to taking swift action to lower rates further if inflation stays within its target and not shoots up as has been observed in recent months.

To put on record, this year alone, RBI has cut the repo rate as many times as twice, by 25 basis points each time, in a bid to bolster economic growth.

rbiA Reuters report while quoting Gaurav Kapur, senior economist at Royal Bank of Scotland in Mumbai said, “Having cut rates in mid-March and mid-January, a pause may be warranted to reassess the outlook on inflation”.

It is needless to say that unseasonal rains have created havoc on rural economy in the country. these rains have also pushed up prices of winter crops, such as wheat and pulses, which could make the RBI cautious over the outlook for inflation.

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