APN News

Quote from VS Parthasarathy,Group CFO, Mahindra & Mahindra on Repo Cut by the RBI

V.S.-ParthasarathyThe RBI was frugal in delivering a 25 bps cut in Repo Rate with an outlook that further action will hinge on evolving data points. While we respect RBI’s action today, we do expect more is in store for the sake of growth, which is still fragile. The widespread prognosis of monetary policy experts, based on today’s policy, is that the RBI will be in  pause mode on rate action from now on until 2016. However, I am an optimist and truly hope that the great Indian orchestra with GoI’s  policy actions, fiscal rectitude, external competitiveness, benign Current Account will be completed by RBI with its high notes of positive rate actions to create a symphony for progress.

For investment to gather speed and feed into demand and output gap to reduce, competitive interest rates are key enablers and it is well known that Indian  real interest rates are well above the desired spread of 150-200 bps, leaving room for reduction of at least 50 bps more.


Source : Lokesh Shastri


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