Banking experts have welcomed the Monetary Policy statement of the Reserve Bank of India. Siddhartha Sanyal, Chief Economist and Head of Research, Bandhan Bank said that, While the RBI maintained status quo on key policy rates, as expected, the central bank turned distinctly more comfortable on recovery in growth and softening in inflation prints despite uptick in global commodity prices such as metals and energy.
The RBI clearly and rightly prefers continuing with their accommodative monetary policy stance as long as necessary to continue supporting the nascent recovery in growth.
He further said that, the central bank remains focused to ensure that the enhanced government borrowing can sail through in a non-disruptive fashion.
Also, normalization in CRR maintenance starting late-March, as has been announced in today’s policy, will offer more room to the RBI to modulate and cater to the market’s liquidity needs through other instruments such as Open Market Operations; that should also be supportive for bonds.