Rajiv Sabharwal: The Indian rupee's resilience, being among the least volatile currencies, amplifies the positive sentiment and demonstrates India's economic resilience on the global stage
FinTech BizNews Service
Mumbai, April 5, 2024: The senior bankers and leading BFSI executives express their studied views on the RBI’s MPC meet decisions, announced today by the RBI governor.
Dinesh Khara, Chairman, SBI: “Tracking the market expectation of the status quo, the monetary policy statement is an affirmation of goldilocks for India with high growth and low inflation in FY25 and FY26. Consumers' confidence in urban households continues to improve, while Rural Demand remains upbeat. The regulatory policy as usual has continued the deepening of payment systems with new functionality in UPI. The review of the LCR framework with the advent of 24/7 payment systems could act as a positive enabler to address frictional liquidity mismatches. The trading of sovereign green bonds in IFSC is also a welcome move and will broaden the markets.”
Rajiv Sabharwal, MD and CEO, Tata Capital: “RBI's choice to uphold the repo rate highlights India's economic landscape, indicating stability and growth ahead. Projecting a 7% GDP growth for FY25 alongside controlled inflation at 4.5% gives a promising outlook. This measure not only instills confidence within the BFSI sector but also clears the path for strategic investments and fosters sustainable growth. The Indian rupee's resilience, being among the least volatile currencies, amplifies the positive sentiment and demonstrates India's economic resilience on the global stage.”
Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank: "At its first bi-monthly meeting for FY25, RBI expectedly maintained a status quo on policy rates as well as policy stance. RBI sounded confident on domestic growth momentum, anticipating an impending recovery in both private consumption and private capex taking shape in the coming months. Conversely, while the projected moderation in headline inflation continues to offer comfort to the central bank, there remains uncertainty with respect to the near-term trajectory of food prices on account of climate risks, and recent increase in global crude oil prices on account of geopolitical tension. The evolving macroeconomic situation thus allows the RBI to continue to maintain its vigil on inflation, to durably align CPI inflation to its 4.0% target in a gradual manner. We see the possibility of rate cycle turning in later part of calendar year only post US Federal Reserve beginning to ease rates. We welcome the regulatory announcement of allowing SFBs to utilize rupee interest derivative products for hedging interest rate risks. This will impart greater flexibility for our hedging operations and help boost the balance sheet resilience."
Vikrant Mehta, Head - Fixed Income, ITI Mutual Fund: “The MPC meeting's decision on the policy rate and stance were on expected lines, which pushed bonds in a tight range post policy. With strong US data keeping global markets guessing on the timing of the US Fed rate cut, it appears that the RBI may want to see some further traction on the same before moderating its policy stance and then towards an eventual easing of the policy rate.”
Radhavi Deshpande, President & Chief Investment Officer, Kotak Mahindra Life Insurance Company: "In line with market consensus, the April MPC has decided to continue with its no change, status quo policy with a 5-1 vote. Consequently, the committee also persisted with its policy stance of “withdrawal of accommodation”, citing challenges related to the last mile of disinflation while acknowledging trajectory of inflation lower. The MPC remains watchful of risks to inflation emanating from global geo- politics, trade disruptions and monitors the progress of monsoon and its impact on food prices. As domestic growth is buoyant, policy focus remains squarely on anchoring inflation expectations and durably achieving a 4% inflation target. In light of the above, bond market yield will continue to be driven by demand - supply dynamics and global development. Expect 10 year benchmark to remain range bound around 7 - 7.10 in near term."
