RBI MPC - Karan Mehrishi, Lead Economist at Acuité Ratings and Research

"With the sharply lower GDP print of 5.0% in Q1FY20 and the continuing accommodative monetary policy of RBI in the face of global headwinds, a 25 bps rate cut was clearly expected. We believe that there may be room for further rate cuts in the current year given the slowdown concerns as reflected by a sharp revision of GDP growth estimates by RBI to 6.1% from the earlier 6.9%. However, Acuité believes that the steps being taken by the government to boost demand along with a good monsoon and increased FII and FDI flows should lead to a healthy revival in growth in H2FY20. We nevertheless, remain cautious on the upward risks to core inflation in the second half due to the ongoing monetary and partly fiscal expansion. Further, RBI's decision to allow higher individual limits for MFI borrowings signals its intent to support a growth in the NBFC-MFI sector and boost lending for economically productive activities." - Karan Mehrishi, Lead Economist, Acuité Ratings & Research Ltd.

Source : Equity Bulls

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