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RBI monetary policy

News: RBI in its latest monetary policy announcement has maintained status quo on key policy rates and stance remains accommodative. GDP growth forecast for FY22 has been retained at 9.5% while inflation forecast for FY22 was also retained at 5.3% while CPI inflation forecast for Q1FY23 has been revised down to 5.0% versus 5.2% earlier.

Views: Accommodative stance of RBI indicates that it may not go for rate hike in near term unless it sees self-sustained growth in the economy. We believe this is positive for banks as softer interest rate regime would continue for some more time, especially with uncertainty revolving around new Covid variant.

Impact: Positive