RBI maintains status quo due to inflation worries: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity Research Analyst - Banking, Angel Broking) on Fourth Bi-Monthly Monetary Policy:

"The RBI has left the key rates unchanged during its Fourth Bi-Monthly policy meet, which was largely as expected. The RBI is of the view that there is an upside risk to the inflation and accordingly it has revised its inflation forest for the 2HFY18 to 4.2-4.6% from a level of 4-4.5% earlier. Further it has revised down its GVA forecast for the year to 6.7% from a level of 7.3%, which seems was on expected line, given the disruption in the manufacturing sector due to the implementation of GST.

However, it believes the issues with regards to GST to be resolved soon. The RBI also remains cautious about the banks NPA issues as it believes the loan waiver could result in further slippages in the industry. We believe due to higher risk of inflation spiking up the RBI may continue to have a neutral stand as of now and may see some relaxation in interest rates towards the end of the year."

Source : Equity Bulls

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