RBI's Mid Quarter Review of Monetary Policy - Mr. George Alexander Muthoot (MD - Muthoot Finance Ltd)

"RBI's monetary policy stance may come as a surprise to many, mostly to the stock markets who had priced in a 25-50bps rate cut. RBI's policy stance has always revolved around the inflation and though inflation seemed contained at 7.7 per cent in March 2012 from 10 per cent in September 2011, it is seen inching up slowly at 7.6 per cent in May 2012 from 7.2 per cent in April 2012, driven by food and fuel prices.

However, the key takeaway here is, that, the RBI is addressing the liquidity issues through open market operations (OMO) and has also kept the window open to use all the available instruments for a rapid response in case of any adversities. This we believe is a positive step and shows RBI's intend to tweak growth when needed."

Source : Equity Bulls

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