3 min read.Updated: 04 Oct 2019, 11:37 PM ISTB. Prasanna
Current growth slowdown is a combination of cyclical, durable and structural factors
With the markets and the analyst community almost unanimously expecting a rate cut, the focus of the monetary policy was on the quantum of the cut, as well as the governor’s speech. Though a reasonable section did expect a 40 basis points (bps) cut, the overall outcome did not disappoint. The sharp downward revision in gross domestic product (GDP) from 6.9% to 6.1% and the explicit accommodative guidance were the key highlights of the policy. Given the extent of the downward revision in GDP, one would have possibly found a 50 bps rate cut more consistent, but the large fiscal stimulus from the government, the narrowing real rates to recent lows and the necessity to get better transmission of past rates probably led them to be a little conservative.
Recommended For You
Select your Category
Internet Not Available
Wait for it…
Log in to our website to save your bookmarks. It'll just take a moment.