Views on RBI Monetary Policy from experts - April 7, 2021

Suvodeep Rakshit, Vice President & Senior Economist at Kotak Institutional Equities:

"The RBI's decisions reinforce the wait-and-watch policy with regards to policy rates as uncertainties remain on the growth outlook. The GSec acquisition program (GSAP) will provide a calendar for OMOs (through the secondary market) which markets have been demanding for some time. This should be positive for the bond market in the near term and push the yield curve to be flatter. Overall, the RBI remains growth supportive and steadfast in keeping yields under check."

Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank:


"Overall a reasonably good policy with the right caution on growth while highlighting inflationary risks. Further the shift from time based guidance to state based one is more realistic given several uncertainties. The OMO calendar along with VRR across maturities points towards a flattening of the curve going ahead."

Mr. Sandeep Bagla, CEO, TRUST Mutual Fund views on the Monetary Policy announced by the RBI earlier today.

Interest rates are likely to remain range bound going forward as RBI is committed to ensure easy liquidity and low repo rates. The increase in Government borrowings are likely to be partially offset by RBI OMOs and secondary market purchases of Government securities. Inclusion of government securities global bond indices will add to the demand. Corporate bond spreads are likely to remain at moderate levels on back of restrained supply and continued demand from institutional investors. Unless inflation expectations start increasing in the future, fixed income investors will do well to remain invested in Indian bonds.