1. Shri Madan Sabnavis, Chief Economist, Bank of Baroda:
“We do expect a status quo decision by the MPC this time. Inflation while being lower than 5% in June is expected to come closer to 6% in July. The prices of vegetables as well as pulses will continue to exert upward pressure on food inflation. With GDP growth in the first quarter expected to be closer to 8% in the first quarter thus indicating stability. There is, hence, no compelling reason to spur growth presently. Hence repo rate will remain unchanged till end of calendar year. Besides, Fed has indicated possible hike in future and treasury yields have moved up. Further, with liquidity being comfortable stance of withdrawal of accommodation will remain. We expect no change in inflation and GDP forecasts.” – Madan Sabnavis, Chief Economist, Bank of Baroda
2. Rajesh Sharma, Managing Director – Capri Global Capital Limited:
“In contrast to the aggressive stance taken by the U.S. Federal Reserve and Bank of England, the Reserve Bank of India (RBI) is expected to keep its benchmark repo rate unchanged for the third consecutive time during its upcoming bi-monthly policy. The present inflation rate in India is reported to be running at less than 5%, which has provided some room for the central bank to maintain a steady monetary policy. However, there are concerns about potential upside risks to this inflation number in the forthcoming months, primarily due to the substantial increase in prices of vegetables and pulses, which should prompt the MPC to maintain status-quo on rates.”
