RBI Monetary Policy - Aug 2020 - Sujata Guhathakurta, President, Debt Capital Markets-Sales, Kotak Mahindra Bank

"I believe it was a balanced policy though it left bond markets a trifle unhappy. The Reserve Bank of India is genuinely concerned about the higher-than-expected Inflation readings and thus has kept its rate cutting option in abeyance till Inflation settles down. The central bank's stance continues to remains accommodative. The market, meanwhile was hoping for a small cut in reverse repo rate, some roadmap for open market operations (OMOs) and some increase in held-to-maturity (HTM) limits, so in that context it is a bit disappointing. However, the focus of the policy was way beyond only rates, and the monetary policy committee has touched upon a few measures like expert committee on reschedulement led by KV Kamath, restructuring of MSME debt, rationalisation of banks investment in debt mutual funds and debt ETFs & review of PSL guidelines which will bring stability and relief to borrowers in this disrupted & difficult economic times due to COVID-19 pandemic."

Source : Equity Bulls

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