The Governor has taken the right step. Food prices have started coming down and as a consequence inflation numbers are bound to come down sharply, said Deepak Parekh, Chairman, Housing Development Finance Corporation.
“It is a calculated risk though, keeping interest rates status quo. As he has said, one does not have to wait for a RBI policy to issue a rate cut. So, there is a disclaimer and a very sensible move.
“Clearly, there is an exit option available for him in the next month. We know that growth is not there. We want growth and investment and don’t want high interest. He has taken a practical decision.”
We would have expected rates to go up, as was being written about, and were pleasantly surprised that it did not happen.
With good monsoons and good agricultural output, inflation is bound to come down. That is what the indication is from the RBI.
V. S. Parthasarathy, CFO, Group CIO, Mahindra & Mahindra : The Governor’s ‘inaction’ on repo rate has been truly a positive action for the markets.
He has taken a balanced approach by supporting growth, while at the same time reserving the right of action outside of policy, based on future prints on inflation.
The industry would welcome the status quo at this crucial time, as a further rise in rates would have negatively impacted the already faltering economy, particularly the manufacturing sector.
Yogesh Agarwal, CEO and MD, of Avantha Group company Ballarpur Industries: While we understand that the RBI has to be primarily concerned with price stability and that fiscal policy also has to complement monetary policy in getting the economy back on track, a symbolic cut would have helped.
Corporate investments and capex, not on stream now, may at least have been given a strong positive signal and interest sensitive sectors could have added to growth.
Kunal Shah, Fund Manager - Debt, Kotak Mahindra Old Mutual Life Insurance : RBI has maintained status quo on rates and has decided to act post the uncertainties on food inflation. Clearly, concern on growth remains the prime focus of the policy.
We believe that the potential growth rate, good monsoon and Government’s commitment on fiscal deficit should bring down inflation in the future, if not drastically, but to sub-10 per cent levels.