Statement from Mr VS Parthasarathy:
As widely expected none of the policy rates have been touched this time in the policy. The RBI has maintained a welcome stance on liquidity supporting measures, at the same time expressing concerns on the upside risk on inflation in the coming months.
Now, we look to a copious monsoon to moderate the upside risk to inflation. We expect the RBI stance to be neutral for the auto industry, and remain linked to the evolving economic indicators.
As a CFO, the promised rejig of MCLR is an interesting nugget from this policy. It could mean a mid-course correction which ensures better pass through to the economy will be achieved. The question to ask is not, “Why no rate cut?” but, “Is it a lull before the rain (not storm)?” or “Pause before a punch?” The monsoon and positive sentiments are at a tipping point and we hope, so is the rate-cut!
