"The measures by the RBI's MPC are prudently aligned to preserve price stability and rein in inflation that has now consistently stayed above the tolerance levels of 6%, chiefly due to geopolitical factors and supply-side challenges. The repo rate hike of 50 bps was with the clear objective to balance inflation and growth without letting both go out of control. Bank deposits may soon become an attractive option for customers to park their surplus funds. We are optimistic that once the geopolitical tensions ease out and supply chain challenges caused by the pandemic are mitigated, India's resilient economy will bounce back. With demand in various quarters already showing recovery after a prolonged period of decline due to the pandemic, we are confident that the interest rates will soon be aligned to the country's growth aspirations." |
