The RBI governor sprang a rabbit out of his hat with a rate hike when the consensus was of a status quo. The repo and MSF rates were raised by 25bps to 8% and 9% respectively while the CRR was left unchanged at 4%. Stating that the RBI is neither hawk, nor dove, Raghuram Rajan said, “We are owls. The owl is traditionally a symbol of wisdom. We are vigilant when others are resting,” add that that the RBI is doing what is necessary for the economy.
The RBI governor made it clear that the primary focus is not the investors, not the markets; it is the consumer and how to bring inflation down for the Indian consumer. In its recent policies, RBI has been laying more emphasis on CPI as an inflation benchmark and therefore making it the key determinant of its inflation-curbing actions. A rate hike of 25bps at this juncture, the RBI says, was required to stem upside risks to the central bank’s CPI forecast of 8% for the next 12 months.
The outlook is a positive start. Global cues are relatively healthy for a change. Bharti Airtel and ICICI Bank results will be in focus today. Even as FIIs were selling domestic institutions saw one of their best single-day buying as they turned net buyers to the tune of Rs11.78bn. Asian markets are marginally higher. US indices eked out some gains.
The RBI governor made it clear that the primary focus is not the investors, not the markets; it is the consumer and how to bring inflation down for the Indian consumer. In its recent policies, RBI has been laying more emphasis on CPI as an inflation benchmark and therefore making it the key determinant of its inflation-curbing actions. A rate hike of 25bps at this juncture, the RBI says, was required to stem upside risks to the central bank’s CPI forecast of 8% for the next 12 months.
The outlook is a positive start. Global cues are relatively healthy for a change. Bharti Airtel and ICICI Bank results will be in focus today. Even as FIIs were selling domestic institutions saw one of their best single-day buying as they turned net buyers to the tune of Rs11.78bn. Asian markets are marginally higher. US indices eked out some gains.
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