The Reserve Bank’s move on policy rate and liquidity front was largely along expected lines, according to P. Nandakumaran, Managing Director, State Bank of Travancore (SBT).
“I should say the market was expecting action on either of the two fronts — repo or CRR,’’ he told Business Line.
But in actuality both have materialised, and is therefore a double benefit.
Nandakumaran agreed that interest rate cues indicate the possibility of transmission of the relief to consumers. But this takes place with a lagged effect, he reasoned.
This has to happen along with what he described as a ‘cooling’ of liquidity, deposit rates and cost of funds at large.
“But we are hopeful of these unfolding one after the other,’’ Nandakumaran added.