RBI is still in wait and watch mode post demonetization, rates remain unchanged : Epic Research

'RBI's monetary policy review' - Mr. Mustafa Nadeem, CEO, Epic Research

As Expected there was a stable stance by RBI keeping key rates unchanged though a change in reverse repo by 0.25 BPS is focused to encourage the deposit while keeping borrowing cost high while RBI has made it clear by reducing the MSF rate that their stance in medium term is to control the inflation. It looks as expected given global inflationary pressures from developed markets and inflationary prices in metals with bullish cycle in near term perspective as well.

Having Rupee at 65 has given some breathing space to RBI and time to focus on other major issues. Allowing banks to invest in REITs is a big positive for realty stocks and we are already witnessing a bullish run up in them. We also expect market to react maturely as it has survived and continued the bullish move in past and same is expected now with any correction being short lived and overall momentum to continue.

MSS, OMO will further be used to manage liquidity as RBI is still in wait and watch mode post demonetization. It is yet to see some numbers and with that growth projections going forward with developments in the monsoon and macroeconomic conditions.

Source : Equity Bulls

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