RBI announced no change in repo-rate while majority of market experts were looking for at least 25 basis points cut. The government trying to help many sectors facing decline in demand with steps taken by finance ministry. However, the trouble for the central bank is different. Taming inflation is a priority for majority of central banks across the world.

The banks have enough of liquidity but the disbursal of loans is low due to already high level of NPAs. RBI has to keep the balance by carefully setting repo-rates.

Comments on RBI Policy by Mohit Ralhan, CIO & MANAGING PARTNER, TIW Private Equity follow....

Given the increase in inflation, RBI had a difficult choice. So, it has for now decided to maintain the status quo. The policy stance remains accommodative with RBI adopting a wait and watch approach. The onus is now on the banks to pass on the previous rate cuts to businesses and consumers.