The mid-year review has initiated a smooth transition in the monetary policy stance. The RBI has continued with monetary tightening to take the anti-inflationary measures to their logical conclusion. At the same time, it has signalled a transition in the stance by indicating that the likelihood of another rate hike is low given the likely moderation in inflation.
The policy statement also outlines several other measures, most notably the deregulation of savings account interest rates. Banks will work out their product strategies to ensure stability of liability franchises and appropriate management of the overall cost of intermediating savings and providing banking services. The freeing up of branch licensing in Tier-II centres is also a welcome measure that will give greater flexibility to banks in expanding their networks across the country.
Going forward, the moderation in inflation could provide room for monetary policy to address growth risks.
+1.jpg)
0 comments
Post a Comment