RBI MPC: Status quo on repo rate likely; what does it mean for equity markets?
Introduction:
RBI Monetary Policy Meeting: What does the probable status quo in the repo rate mean for the equity markets?
The conclusion of the RBI Monetary Policy Meeting (MPC) made public on October 6. In anticipation of the result of the MPC meeting, market participants seem wary.
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On October 5, the Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) is likely to keep its policy rate unchanged for the fourth time in a row.
RBI Monetary Policy Meeting
An economist from Prabhudas Lilladher told Moneycontrol that while this may at first increase market euphoria, investors should be prepared for potential volatility and balance their plans between economic prospects and inflationary dangers. “A discerning focus on resilient sectors will be key in navigating this complex landscape,” the economist continued.
Markets’ statement regarding MPC results
A contradictory message sent to equity markets. RBI chooses to hold repo rate at 6.5% and maintains “withdrawal of accommodation” policy. Despite the escalating internal and international economic concerns.
“On the one hand, it demonstrates the central bank’s confidence in the current economic trajectory, on the other hand, this pause, coupled with the hawkish undertones from the MPC’s recent minutes, underscores the RBI’s readiness to counteract any inflationary spikes,” said the economist.
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