The mid-quarter monetary policy review comes with no surprises, as the general consensus was RBI would maintain status quo on the repo rate and the CRR.
India’s GDP growth for FY13 is pegged between 5.7 and 5.9 per cent. This means GDP would need to grow by 6-6.4 per cent in the second half of the financial year. While business sentiment has improved, the projections appear optimistic. Despite inflation tapering in the recent period, RBI has cautioned that the next two months may see inflation going up.
What is reassuring is that RBI has indicated it is preparing to shift its policy stance to support growth. Thus, one would expect an easing of interest rates in the early part of 2013. This, coupled with RBI’s notification on ECB for low-cost housing, is a welcome move for housing finance companies.
Keki M Mistry
VC & CEO, HDFC Ltd