April 8 (Reuters) – The Reserve Bank of India kept its key policy rate unchanged on Wednesday as it awaits clearer evidence of the impact from the Iran war on the South Asian nation’s economy.
COMMENTARY:
SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI
“RBI actions and its stance will certainly help but may not be enough given supply disruptions, tariffs and AI-related fears looming in the backdrop.”
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“The RBI MPC policy outlook (has) shifted from a ‘benign inflation–strong growth’ scenario to a more ‘cautious balancing act’.”
“Neutral stance also provides the ability to be nimble with policy shifts in case the war is more prolonged than assumed. The central bank’s remarks on inflation indicate concern that a prolonged supply shock could evolve into a demand-driven one. This suggests that second-round effects would need to materialize before interest rate hikes become a realistic consideration.”
SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI
“The RBI is likely to continue with a data-dependent approach, suggesting an extended pause in rates.”
“The broader policy stance is also likely to remain neutral, although liquidity conditions may continue to be managed in an accommodative manner. Overall, this policy mix appears neutral to marginally supportive for equities, fixed income and the foreign exchange market.”
VIKRAM CHABBRA, SENIOR ECONOMIST, 360 ONE ASSET, MUMBAI
“The economic outlook remains clouded by uncertainty.”
“The two‑week ceasefire in West Asia has eased tensions for now, but inflation and growth risks continue to loom over the economy. El Niño adds to the pressure, threatening a weak monsoon and higher food prices.”
“With war and weather unresolved, the RBI is likely to stay on pause until a clearer picture emerges.” UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI”RBI expectedly kept rates and stance unchanged.”
“After the circulars on restricting offshore speculative activity, the recent de-escalation on the geopolitical front has provided some relief to the Indian rupee, providing room for RBI to assess the lasting impact on growth (and) inflation.”
“We expect RBI to be squarely data dependent henceforth given the fluidity of the situation. Meanwhile, we expect RBI to monitor liquidity conditions closely.”
(Reporting by Urvi Dugar; Compiled by Dhanya Skariachan; Editing by Ronojoy Mazumdar and Eileen Soreng)
