Why the Decision of the MPC to Not Cut Rates was a Good Decision

The markets were largely disappointed by the decision of the Monetary Policy Committee (MPC) to maintain status quo on rates. The expectation was for a 25-50 bps cut in rates. However, the choice of the MPC not to cut rates was a good decision in retrospect. Here is why… Continue reading

Key takeaways from the December 2016 Monetary Policy

The RBI monetary policy announced on December 07th 2016 had an element of surprise in that it maintained status quo on repo rates. Considering the low levels of inflation, weak growth and the side effects of demonetization, the markets were expecting a rate cut in the range of 25-50 bps. However, the RBI chose to err on the side of caution.. While the details of the deliberations of the Monetary Policy Committee (MPC) will be available on December 21st, there was virtual unanimity on the decision to maintain status quo on rates. Here are the key highlights of the monetary policy announcement… Continue reading

RBI Credit Policy – Investors get more than they bargained for…

If there was one way to describe the RBI policy announced on 29th September 2015, it was a policy that exceeded expectations by a margin. Markets were expecting a 25 bps rate cut and preparing for a zero bps rate cut with a hawkish tone. What the markets actually got was a pleasant surprise! The RBI cut rates by a full 50 basis points and did not rule out further rate cuts, thus keeping the tone as dovish as possible. Also there were some more items for the markets to rejoice.

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