ICICI Prudential comments on RBI policy

India Infoline News Service | Mumbai |

RBI highlights that it would continue to endeavor bringing down inflation to its medium term target of 5% by Mar-14 .

Rahul Goswami, CIO Fixed Income, ICICI Prudential AMC said "RBI has stated that while prevailing growth-inflation dynamics could have provided room for easing, it was constrained by external sector stress especially the uncertainty regarding QE tapering. While RBI left rates unchanged in line with market expectations, it has lowered its growth forecast to 5.5% from 5.7%. RBI highlights that it would continue to endeavor bringing down inflation to its medium term target of 5% by Mar-14 (long term target 3%) using all instruments at its command. RBI has said that the recent sharp liquidity tightening measures are temporary and a gradual roll back can be expected once currency stabilizes. Monetary policy going forward will be shaped by the considerations of supporting growth, anchoring inflation expectations and maintaining external sector stability. At this juncture, bond yields have become very attractive for investments and present a reasonable opportunity for investors to further add debt funds in their portfolio."

 

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