Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank Ltd.
A Status Quo and Growth-oriented Policy
In line with market expectations, the Monetary Policy Committee (MPC) has kept the repo and reverse repo rate unchanged and the policy stance remains accommodative. All high frequency indicators in Aug & Sept indicate the return of economic growth on the back of renewed consumption demand, capex by government, exports, a normal monsoon as well as manufacturing and services seeing a comeback.
The inflation trajectory moderated in Q2 and is projected to be around the 5% mark, within RBI's tolerance levels.
Overall, the MPC is keeping a close eye on a sustained pick-up in growth, given slowing growth patterns in some of the other economies. The policy had a "balanced and neutral" tone - with continued support for growth and a commitment to a gradual and calibrated change in policy based on emerging data and events.