By Tricitynews Reporter
Chandigarh
08th February:- The key highlight of the sixth bi-monthly RBI
credit policy of 2017 is the change in monetary policy stance from
Accommodative to Neutral. This coupled with no change in the repo rate has come
across as more hawkish than expected.
Volatile global trends, expected higher
inflation, growth and interest rates in the US, and sticky domestic core
inflation other than food and fuel seem to have influenced the change in
stance.
Inflation targeting is key here. While
inflation is likely to be subdued in Q1 of FY 17/18, upside risks outlined have
firmed up global commodity prices including energy, currency volatility due to
global factors and inflationary impact of 7th pay commission.
Banks have already transmitted rate reduction
on account of liquidity surge in the banking system as a result of
demonetization. This is expected to spur consumption and investment. Overall,
the policy has a hawkish tone. From here on, global and local factors will be
monitored closely to see the impact on inflation and growth for future policy
stance.
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