Jyoti Vaswani
CIO, Future Generali India Life Insurance
MPC has yet again delivered a ‘Pragmatic Policy’ by extending the financial safety net to assuage the stress in the system, while reassuring the hopes of further easing.
The decision of ‘status quo’ stems from the fact that the near term inflation outlook remains uncertain owing to supply side disruptions and cost push factors and thus underscores MPC’s cautious stance and its commitment towards their prime objective of inflation targeting. Nonetheless the MPC has conspicuously signalled further policy space by maintaining accommodative stance, thus giving reassurance to the markets of the requisite support as the inflation recedes in the second half.
The extension of the MSME restructuring and the opening up of restructuring window for corporates, personal loans and MSME’s ,along with additional liquidity to NHB and NABARD, is indeed a welcome move for the liquidity strapped sectors. Besides increase in LTV for gold loans is yet another significant step. Overall it was a balanced policy with MPC delivering on all fronts and exemplifying the need to use policy space judiciously to maximize its beneficial impact on the economy. (Share Manthan, 6th August 2020)
