RBI’s policy communication nuanced, says SBI’s Khara

State Bank of India (SBI) Chairman Dinesh Khara said the RBI policy communication was nuanced, and rightly exercised caution on the inflation trajectory given the current jump in vegetable prices in his comments on the monetary policy.

State Bank of India (SBI) Chairman Dinesh Khara said the RBI policy communication was nuanced, and rightly exercised caution on the inflation trajectory given the current jump in vegetable prices.

“With capacity utilisation currently running higher than the long-term trend, the central bank does have the bandwidth to look through the current increase in food prices,” he said in his comments on the monetary policy. 

Ashu Khullar, CEO, Citi Inda, said, “RBI’s status-quo policy with a balanced rhetoric around it, is likely to ease any market fears of a knee-jerk monetary policy reaction to the vegetable price-led spike in near-term inflation.” 

“At the same time, the RBI’s views on resilience of the domestic growth outlook in a challenging global environment, is comforting. We would expect the stability in the policy rates to continue for a longish period, which would support both the growth and inflation objectives,” said Mr. Khullar

Rajiv Agarwal, MD & CEO, Essar Ports said, “The MPC’s dedication works to harmonise inflation with a 4% objective. Demonstrating prudence, the RBI retained the repo rate at 6.5%, upholding stability while envisioning a steady 6.5% growth for FY24 despite inherent uncertainties. We hope to see reduction in rates in months to come.”

Ankush Kaul, Chief Business Officer, Ambience Group said, “The decision is welcome news for prospective homebuyers who plan to apply for home loans in the near future. The current momentum in housing sales, which have shown spectacular increase in the first half of 2023, is anticipated to be sustained by the unaltered repo rate.”

“The expectation for steady repo rate is encouraging for people looking to take home loans to buy their first home because most banks’ interest rates are expected to stay in the single digits,” he added