RBI has left the rates unchanged while the market was expecting at least 25 basis points cut. Some analysts were also expecting 50 basis points cut in repo-rate considering the pro-active government in the wake of lower GDP growth. However, the status quo by RBI would raise the expectations on rate cut in the next policy meeting.

Comments on RBI decision by Epic Research follow.....

The Reserve Bank of India has kept the policy Repo rate unchanged at 5.15% as against the ambitious street projections of 50 bps. The MPC has specifically mentioned keeping an accommodative stance in the future to revive the GDP Growth. We have already seen quite a few rate cuts in the past and going forward we believe that accommodative stance would be maintained.

What we need is Credit Growth to pick up as you see there have been 135 bps cut in policy repo rate since Feb-19 but the transmission in the Credit market is sluggish and partial in G-Sec. We need to see transmission happening in Lending Rates across the market.

The Union Budget is two months away so we believe we can see certain measures post Budget.