Madan Sabnavis, Chief Economist of Bank of Baroda’s comment on Monetory policy

“ The cut in repo rate and the commentary does indicate that the MPC could be looking more at the inflation-growth dynamics instead of only inflation which was the earlier perception, going forward. Therefore, we could expect more rate cuts based on economic data. We do think the GDP forecast made for next year at 6.7% is very much doable. Inflation at 4.2% will be contingent on both a good monsoon and limited impact of imported inflation. There could be an upside here given global uncertainty, and needs to be watched. The RBI has also clearly stated to the market that it is not targeting an exchange rate and will also ensure orderly liquidity in the market.”