RBI Monetary Policy Review - A Firm Hand: IDFC Research

The Reserve Bank of India /Monetary Policy Committee raised repo rate by 35 basis points to 6.25%, as was widely expected.
<div class="paragraphs"><p>RBI (Source:&nbsp;Vijay Sartape BQ Prime)</p></div>
RBI (Source: Vijay Sartape BQ Prime)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

IDFC Research Report

The Reserve Bank of India /Monetary Policy Committee raised repo rate by 35 basis points to 6.25%, as was widely expected. There was one dissent on this; from Professor Varma who preferred no hike. The stance was continued as ‘withdrawal of accommodation’ with two dissents; from Dr. Goyal and Professor Varma.

The assessment was somewhat more hawkish than general market expectation.

We elaborate upon our impressions below:

On rate hikes a general sense of RBI commentary for most of the year has been that India’s forecasted inflation trajectory was actually quite benign, and that growth had required extra-ordinary loose monetary conditions till the start of this year.

Then the war broke and ‘upset the applecart’ so to speak. But by now significant parts of the war-led commodity shock, most notably in crude oil and metals, have unwound.

However, the Governor’s commentary was focussed on the persistence of core inflation and the need to break this. Indeed the MPC notes the need to 'keep inflation expectations anchored, break the core inflation persistence and contain second-round effects, so as to strengthen medium-term growth prospects'.

More generally, the potential salutary effects on output prices from correction in industrial input prices and supply chain pressures are noted.

Click on the attachment to read the full report:

IDFC Research A Firm Hand - RBI Policy Dec 2022.pdf
RBI Monetary Policy: Six Key Takeaways From Shaktikanta Das' Speech
RBI Monetary Policy Highlights: MPC Hikes Repo Rate By 35 Basis Points, Trims Growth Forecast
RBI Monetary Policy Review - Rate Hike Continues; Commentary Still Not Dovish: ICICI Direct
RBI Monetary Policy Review - Repo Up By 35 Basis Points, Inline With Estimates: IDBI Capital
Is The RBI Hawkish?


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Get Regular Updates