A CIO's take on Repo rate

MUMBAI, INDIA: The Reserve Bank of India (RBI) maintains policy repo rate and stressed on bringing down inflation (to six per cent by January 2016) as it hinted at spurring lending in today's monetary policy unveiling. It slashed the statutory liquidity ratio (SLR), by half a percentage point to 22.0 per cent of deposits. 

As per Nirakar Pradhan, CIO, Future Generali India Life Insurance, maintaining the stance on disinflationary glide path announced in the earlier policy, the Reserve Bank of India today has kept the benchmark Repo Rate unchanged at eight per cent.

"The RBI monetary policy targeting a CPI inflation rate of six per cent as on January 2016 complements well with the Government pursuing the fiscal deficit target of three per cent as on March 2017. These measures would bring down inflation and likely provide Indian savers real rate of return in future."

He also opined that reduction in statutory liquidity ratio (SLR) by 50 bps to 22 per cent of NDTL will release liquidity approx. Rs.40,000cr to the system. The stable interest rates and improved liquidity conditions will support the ongoing economic recovery process".