RK Gurumurthy of Lakshmi Vilas Bank shared his opinions on what market is expecting from RBI in September policy meet. According to him, the inflation is well within the trajectory of RBI; therefore, it should think about a rate cut.
RK Gurumurthy of Lakshmi Vilas Bank shared his opinions on what market is expecting from RBI in September policy meet. According to him, the inflation is well within the trajectory of RBI; therefore, it should think about a rate cut.
Currency Trend In India
In Gurumurthy's opinion, the rupee is not as strong against the dollar as it was three months ago. Given that RBI, the meeting is scheduled on September 29 and quarter ending pressure is there in the market, the currency trend isn't looking good at this moment. There are high chances that rupee might remain weak against the dollar for the next couple of weeks.
RBI's Role In Liquidity Management
With FII's withdrawing funds from the Indian market, the liquidity seems to be going downward; however, Gurumurthy thinks that the liquidity is not completely negative at this moment. It's been a mixed situation for the last couple of weeks and is expected to remain in the same zone over the next few weeks or so. There is no urgent need of liquidity management at this moment, so RBI can keep its focus intact on inflation and bank rates.
Expectations From RBI
The market has seen a lot over the past few weeks. There is a need of quick relief from RBI's side; hence, it should think of a rate cut. As of now 25 bps cut should be good enough to revamp the market.
Growth Prospects of India From This Level
As the financial market is going through a tough phase at this moment, keeping growth expectations down is the best solution available in the market. The CPI numbers of August are lowest in the past few months, which gives a clear indication that the headline inflation in February will be around 7 percent. It's well under RBI's trajectory and can help it take a call on the bank rate cut issue and fuel some positivity in the market before the festive season starts.
Currency Trend In India
In Gurumurthy's opinion, the rupee is not as strong against the dollar as it was three months ago. Given that RBI, the meeting is scheduled on September 29 and quarter ending pressure is there in the market, the currency trend isn't looking good at this moment. There are high chances that rupee might remain weak against the dollar for the next couple of weeks.
RBI's Role In Liquidity Management
With FII's withdrawing funds from the Indian market, the liquidity seems to be going downward; however, Gurumurthy thinks that the liquidity is not completely negative at this moment. It's been a mixed situation for the last couple of weeks and is expected to remain in the same zone over the next few weeks or so. There is no urgent need of liquidity management at this moment, so RBI can keep its focus intact on inflation and bank rates.
Expectations From RBI
The market has seen a lot over the past few weeks. There is a need of quick relief from RBI's side; hence, it should think of a rate cut. As of now 25 bps cut should be good enough to revamp the market.
Growth Prospects of India From This Level
As the financial market is going through a tough phase at this moment, keeping growth expectations down is the best solution available in the market. The CPI numbers of August are lowest in the past few months, which gives a clear indication that the headline inflation in February will be around 7 percent. It's well under RBI's trajectory and can help it take a call on the bank rate cut issue and fuel some positivity in the market before the festive season starts.
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