RBI Surprised Everyone By Not Increasing The Interest Rate

RBI surprised everyone by not increasing the interest rate, SBI Research praised in the report.

RBI has surprised everyone by not increasing the interest rate, not making home loans and car loans expensive, RBI has given a big relief.

The Reserve Bank of India (RBI) has kept the policy rate and liberal stance for the tenth time in a row, surprising everyone, as well as keeping a clear distinction between policy stance and policy strategy.

Bond yields fell seven basis points (0.07 percent) to 6.73 percent on Thursday after leaving no change in policy interest rates, according to a report by SBI Research.

Immediately after the announcement of RBI, it had declined by 0.1 percent but later the situation improved slightly.

In contrast, bond yields rose to 6.88 percent after the announcement of capital expenditure of Rs 7.5 lakh crore on the day of the Budget.

RBI has said after the monetary policy review that the GDP growth rate in the financial year 2022-23 is estimated at 7.8 percent and inflation at 4.5 percent.

Along with this, it has projected the Wholesale Price Index to be around 2.8 percent in the next financial year.

Soumya Kanti Ghosh, the chief economic advisor at SBI, expects 10-year bond yields to decline further and stabilize at 6.55-6.6 percent.

He said that even though the RBI’s policy statement took the market by surprise, the central bank may have been ahead of the market’s expectations.

Due to this, the policy strategy and stance of RBI in the financial year 2022-23 may be different. He called it a truly unconventional monetary policy.

Ghosh said that while the RBI has clarified the difference between strategy and trend, it has also shown that both can co-exist. He said that both of them work as a complement to each other.

How will the business be in Dalal Street this week, know the expert’s opinion.

Another week of a volatile market. Inflation and the Fed are giving volatility creators a chance. Now 17000 points and 17800 range are formed.

This reminds us of the 14200 and 15000 ranges, where this range fluctuated about 10 times. This is a repeat story.

The market ignored Powell’s statement and relied more on Russia to raise the rate by 100bps and the Fed’s prediction of a 7x increase in the GS statement.

It is clear that the GS appears to be small globally and hence such predictions have been made. How many times has GS been proved correct?

The SGX closed at 17260 after the DOW dropped 500 points. Dalal Street will hit 17100 or 17080 once again next week. But I think this is a buying opportunity.