Views on RBI policy - Radhika Raoa, DBS Bank

Views of Radhika Rao, Chief Economist, DBS Bank on the RBI Policy Announcement -

"The RBI stuck to script and delivered a no-change on rates on Tuesday. Pipeline inflation risks were highlighted as a reason for the central bank to remain vigilant on further monetary easing, but added that policy outlook was still accommodative. External cross-currents from the ECB exploring additional QE this week and impending US Fed rate hikes will also require policymakers to maintain a cautious stance. For the currency in particular, strong rupee gains on real basis requires the central bank to act to limit volatility in the event of external risk events. In all, the central bank is likely to remain on the path of least resistance by keeping rates on hold this fiscal year, while factoring in February's budget and deciphering the impact of the upcoming public sector wages on fiscal books and on inflationary expectations."

Source : Equity Bulls

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