RBI central bank has set an inflation target of 4.8%
As expected, RBI has cut the benchmark rate by 25 basis points, while maintaining a neutral stance, aligns with our expectations
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Mumbai, Feb 07: As expected, RBI has cut the benchmark rate by 25 basis points, while maintaining a neutral stance, aligns with our expectations.
The central bank has set an inflation target of 4.8% and we don't anticipate another rate cut in the next meeing.
Suresh Darak, Founder, Bondbazaar says thatt
he RBI acknowledged the system's liquidity deficit and committed to providing liquidity as needed. On the currency front, they've chosen not to set a specific target, instead focusing on preventing excessive volatility.
Considering these factors, bond market rates appear to have bottomed out, potentially remaining steady or experiencing a slight uptick. However, in the currency market, the rupee still needs to discover its true level amidst the strengthening dollar globally against all major currencies including india.
Kishore Lodha, Chief Financial Officer, UGRO Capital says "The much-awaited rate cut has finally arrived, easing interest rate pressure on the industry as a whole and providing relief to home loan borrowers. However, liquidity has turned negative, which remains a cause for concern”.
The RBI is closely monitoring the situation and implementing measures to mitigate the risk. Inflation has moderated, and the RBI expects it to average 4.2% next year, creating further room for additional rate cuts. Key factors to watch include geopolitical developments, Rabi and Kharif crop yields, GDP growth, and inflation trends."
