Investors Clinic - Noida

 Raghvendra Nath, Managing Director,  Ladderup Wealth Management 

“Lower growth forecast, raising inflation forecast and a spike in commodity prices due to the on-going geopolitical unrest, does not come as a surprise. In order to maintain current growth environment, RBI has continued with an accommodative stance. However, with a caveat, that it might withdraw its accommodative stance to ensure inflation remains within the target level. If RBI follows the path of Western Central banks and raises rates, then the existing capex plans in pipeline might be impacted.”

Shishir Baijal, Chairman & Managing Director at Knight Frank India.

WELCOME RBI’S STANCE TO MAINTAIN REPO DESPITE PRESSURES

Despite the disruptions from geo- political challenges as well as inflationary pressures, the RBI recognises the need to maintain economic growth momentum. We welcome the RBI’s continued accommodative stance and status quo on REPO rate. For the real estate sector, low interest rates for a long period of time has served as a key catalyst for the resurgence of demand.  The status quo on REPO rates will help maintain the current demand levels as interest rate for both homebuyers and developers are likely to be maintained by financial institutions.

Madan Sabnavis, Chief Economist, Bank of Baroda

“The credit policy has surprised the markets with aggressive changes in projections for both GDP and inflation. For GDP growth it is 7.2% (Bank of Baroda: 7.4-7.5%) while inflation has been increased to 5.7% (Bank of Baroda: 5.5-6%). There is a clear hint that the accommodative stance though retained will change as there will be a gradual withdrawal of liquidity keeping in mind the trends in inflation. The interesting introduction of the SDF notwithstanding the high level of bonds held by RBI does indicate that the overnight reverse repo would no longer be attractive as the SDF gives higher return. These are clear indications of the repo rate being increased during the course of the year and we do expect at least 50 bps increase this year. The markets have already reacted with the 10-year bond going up past 7% and we expect the rate to go up to 7.25% this year.”

DRE. Reddy, CEO and Managing Partner at CRCL LLP

RBI’s accommodative stance is a welcome move to revive and sustain growth. While the Indian economy is steadily reviving from pandemic led contraction, recent geo-political tensions has led to increase in price of the several commodities such as oil and natural gas, wheat and corn, edible oil, fertilizer, milk, chicken, poultry. The ongoing conflicts has brought in risk of slow growth and higher inflation. Given the scenario of increasing food and crude oil prices, we may see prolonged supply disruptions which will further harden food prices globally. Sharp increase in international prices implies increase in rates across manufacturing, agriculture and services.

Nish Bhatt, Founder & CEO, Millwood Kane International

“ The current RBI policy did not have any surprises, it kept rates unchanged for the 11th straight policy. But it has clearly laid out the path to policy unwinding. The focus from now on will be to withdraw the accommodative policy stance to keep inflation in check. Today's announcement clearly indicates the end of easy monetary policy by RBI, the same reflected well on the 10-Year benchmark yield which hit a multi-year high.

The unwinding of liquidity will create some turbulence, and the likely reason for RBI to lower the growth rate projection for FY23 to 7.2%, inflation aim hiked to 5.7% from 4.5% earlier. The clear aim of the central banks worldwide is to control inflation, unwind easy liquidity and focus on slow and steady growth.”

Honeyy Katiyal, Founder-Investors Clinic

"The central bank's outlook on inflation and growth is being overtaken by events, notably the war in Ukraine, according to a growing chorus of Indian monetary policy officials. This is  signifying a change of course. Keeping the stance on rates is a supportive move for the industry. The increase in rates was expected due to high inflation. Housing sector activity will keep the same pace, which is good news for developers. This balancing act was essential, and RBI has been maintaining the same for recent quarters by holding rates steady. In real estate, the unchanged rates have aided in boosting the sector, which relies heavily on government efforts and subsidies."