Quote on RBI’s monetary policy announcement




RBI policy - Comments of Khushru Jijina, MD, Piramal Capital and Housing Finance

RBI policy - Comments of Khushru Jijina, MD, Piramal Capital and Housing Finance


“The downward revision of growth projection by the Reserve Bank of India (RBI) from 7.2 % to 7% in 2019-20 calls for the implementation of additional rapid policy interventions by both RBI as well as the Government. The unanimous decision by the Monetary Policy Committee (MPC) to cut the repo rate by another 25 bps is a step in the right direction.

NBFCs are instrumental in providing credit to MSMEs and real estate sectors, that are significant to India’s GDP. MSMEs contribute 31% of the GDP, 40% of exports and hires 25% of the labour force while real estate contributes more than 5% to GDP and hires 17% of the labour force directly or indirectly.

The credit crunch in the NBFC sector has witnessed a corresponding decline in manufacturing and construction activities in the last two quarters of 2018-19. We anticipate more decisive and pro-active policy measures to address the current liquidity crisis, that will enable NBFCs to restore lending activities, especially to these critical sectors.”


Quote on RBI’s monetary policy announcement | From Elara Technologies that owns Housing.com, PropTiger.com, Makaan.com and Fastfox

Quote on RBI’s monetary policy announcement | From Elara Technologies that owns Housing.com, PropTiger.com, Makaan.com and Fastfox

In a move that was largely anticipated, the RBI has cut its repo rate by 25 basis points for the third time in a row, this year. The repo rate now is 5.75% and its future monetary stance has been changed from neutral to accommodative, a move that is being hailed by the industry as a much needed one.

“This move to reduce the repo rate will be great from a sentiment point of view, and will add to the current wave of optimism that has been infused into the market, with the re-election of the NDA government. Whether home buyers benefit from this directly or not, will depend largely on whether the banks pass on the rate cut benefits to them. In the past, that has not happened. However, this fact is also to be evaluated in light of another fact - with the ongoing NBFC crisis and increasing NPAs, reducing interest rates for borrowers, is not very easy for banks. We are however hopeful that with the increasing sales momentum in the last quarter and the improved market sentiments post the election results, this move will add a much-needed boost to the current market sentiments.”


Comments by Mr. B Prasanna, Group Head – Global Markets – Sales, Trading and Research, ICICI Bank on RBI Policy announced today

Comments by Mr. B Prasanna, Group Head – Global Markets – Sales, Trading and Research, ICICI Bank on RBI Policy announced today

“The policy was very positive and was reinforced by unanimous voting and the change in stance to accommodative. The statement’s focus on supporting growth and bolstering private investment as long as inflation remains within the mandate, is also encouraging and leads us to believe that more accommodation is on the cards.

Our own expectations for growth and inflation for FY2020 also underscore this view as we expect headline inflation to average under 4% and have revised our growth forecasts lower. The internal committee for liquidity framework is a welcome step. It will help to reduce the information asymmetry regarding systemic liquidity and will benefit not only markets but also banking decisions as regards, deposit taking, lending and transmission. Further, in light of the recent upheavals in the NBFC space, the Governor’s statement that all necessary steps would be taken to maintain financial stability is reassuring.”


Views on RBI Policy - Quote Kumaresh Ramakrishnan, Head - Fixed Income, DHFL Pramerica Mutual Fund

Views on RBI Policy - Quote Kumaresh Ramakrishnan, Head - Fixed Income, DHFL Pramerica Mutual Fund

The Monetary Policy Committee unanimously voted today (6-0) for a rate cut of 25 bps and a change in stance from 'neutral' to 'accommodative'. The rate and stance easing were helped by RBI's assessment of downward revision in GDP to 7.0 for FY 20 (by 20 bps over the earlier forecast) and a lowering of the upper end of the inflation band by 10 bps to 3.7% by March 2020. Given that the one year forward CPI forecast is well under the medium term CPI target of 4%, the policy tone was distinctly accommodative and pro-growth.

Recent rounds of liquidity infusion both through OMOs and INR - USD swaps have started reflecting in easing liquidity conditions causing the average daily surplus in June to turn positive to the tune of INR 660 bio. The MPCs assessment of a distinct weakening in growth conditions, slow-down in investment activity, fall in consumption and expected inflation trajectory remaining below the target are all positives for yields in the near to medium term.

The yield curve which has already witnessed a fair amount of steepening is likely to continue some more in our view, aided by the extremely positive comments on liquidity. Given this backdrop, the short (1-3 years) and medium term funds (2-5 years) continue to look very attractive. Some allocation to Dynamic bond funds could also be considered to take advantage of fall in long end (7-10 years) yields as well.


Quote from CBRE | RBI's decision to cut the repo rate

Quote from CBRE | RBI's decision to cut the repo rate


Anshuman Magazine, Chairman & CEO, India, South East Asia, Middle East & Africa, CBRE, says, “The Reserve Bank of India’s decision to cut the repo rate by 25 basis points is a welcome one. This was expected, given the backdrop of low inflation and rising growth concerns in the economy. The rate cut coupled with the budget stimulus for the economy, and the real estate sector in particular, will impact consumer sentiments positively.”