RBI’S  SIXTH  BIMONTHLY  MONETARY  POLICY – NO AIRLIFT, WE ARE STILL STUCK

Not being in the best of my healthy spirits, I missed writing my blog for the last monetary policy meeting for FY 15-16. Though I had decided to read ‘Wuthering Heights’ to calm my nerves, I ended up reading anything and everything related to the latest policy review.  I think whatever I felt got transmitted to our stock markets as they fell both on the policy day and day the after. Don’t worry I am not trying to find any co-relation as there are soo many factors to co-relate including our own Indian cricket team.

Although the policy was pretty expected, the statements made by our governor with respect to structural reforms which the government has to undertake in the coming budget, to give the RBI its happy space to cut rates spooked the markets. You can’t blame him actually as most of the stock markets world over declined both on Tuesday and Wednesday for mundane obvious reasons. And on Thursday everything was fine including me.  So we have our repo rate still at 6.75% which might be reduced by some 25 basis point, if circumstances do allow. Here circumstances refer to both global and domestic, inflation data which is due in a few days and how the central government implements 7^th pay commission recommendations. With respect to liquidity concerns, RBI pledged to take action by timely infusion of liquidity through OMO’s and on the whole call markets rates are in tune with policy rates.

So in the end our Governor has invited Mr Jaitely for a long walk together. Mr. Jaitley you are so lucky, there are so many out here dying to be in your shoes.