RBI policy expectation: Shriram Transport Finance

8 Feb 2022 , 05:51 PM

“We believe that RBI and has a challenging task at hand. Growth recovery is still uneven and due to various reasons like high oil prices, supply chain disruption, cost pressures are building up thereby leading to sticky core inflation. With its major thrust on capital spending in the recent Budget 2022-23, the fiscal policy continues to be overall supportive of long term growth. Given that on one hand uncertainty around the Covid variants continue and growth is still uneven, inflationary expectations remain high and globally central banks are withdrawing easy monetary policy, against this backdrop, we expect the RBI to continue its path of policy normalization but, rather slowly.

As food inflation is likely to be benign, we expect the RBI to hike reverse repo rate first and then may be towards the second half of 2022 there could be a hike in repo rate as well.  We expect the RBI to continue with its sops for the MSME / SME sector and support the weaker section of the society. Since MSMEs and self-employed have been the most impacted during the pandemic and most NBFCs lend to this segment, we are hopeful of some additional credit and policy support. CV sales in Q3 have been flat, however with the infra push from the budget 2022 we expect healthy revival in credit in 2022″.

The author of this article is Mr. Umesh Revankar, Vice Chairman & MD, Shriram Transport Finance

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com