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rbi: Policy on expected lines, RBI has not let down its guard on inflation: Bankers

Bankers reacted to the RBI’s status quo on rates and the policy stance as being on expected lines and stressed that it is evident that the central bank has not let its guard down on inflation. “The pause on the rate front and no change in the stance of the policy were on the expected lines. Evidently, RBI has not let the guard down on the inflation front,” industry lobby grouping Indian Banks Association’s chairman and state-owned Punjab National Bank’s managing director and chief executive AK Goel said.

The RBI’s projection on CPI (Consumer Price Inflation) at 5.1 per cent is a tad lower than the 5.2 per cent projected in the April policy, he said, adding that the RBI wants to assess the full impact of the rate hikes of 2.50 per cent on headline price rise first.

State Bank of India’s chairman Dinesh Khara welcomed the nuanced communication tailored to anchor market expectations for the future in terms of a durable glide path of inflation.

“The bouquet of policy changes on the development front covers a wide spectrum and prioritises resolution, risk management, and digital innovation, and addresses issues relating to market microstructure,” he added.

IDBI Bank’s deputy managing director Suresh Khatanhar said the pause in the rate hike cycle augurs well as it would further help in arresting inflation, boosting investment and consumption sentiments.

“The lowering of the inflation projection for FY24 to 5.1 per cent signals towards a higher GDP growth and credit offtake can be expected to be higher,” he added. Among the foreign lenders, Standard Chartered Bank’s country head Zarin Daruwala said the decision reflects continuity in its approach of gradualism and reiterates its commitment to support growth as well as rein in inflation to target levels.

“RBI’s positive outlook on growth, inflation trajectory and other macro fundamental bodes well for the economy,” she said, welcoming regulatory and developmental measures.

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