Policy tone continues to reflect accommodative cycle: Bankers

Terming the policy outcome as expected, State Bank of India Chairperson Arundhati Bhattacharya said, “the tone of the policy is fairly balanced, pragmatic and continues to reflect accommodative cycle.... Inflation trajectory seems broadly in line with RBI prognosis, though we are fairly hopeful of inflation possibly undershooting the 5 per cent target set for March 2017,” the SBI chief said.

 Her peer from private sector ICICI Bank Chanda Kochhar said the continued commitment to an accommodative policy stance and the assurance of moving towards a neutral liquidity framework is positive, which should continue to support transmission of the RBI’s policy stance.

 

“The reassurance that the RBI stands ready to mitigate any financial volatility resulting out of FCNR deposit maturities due later this year is very welcome. Overall, macroeconomic conditions are conducive for an improving growth trajectory as the various policy measures announced by the Government take effect.”

 Melwyn Rego of Bank of India welcomed the RBI measures to address the liquidity deficit in the system by promising to progressively lower the average ex-ante from 1 per cent of NDTL to a position closer to neutrality.  “The move will help in quicker transmission of monetary policy initiatives, with MCLR framework in place, which will lend support to growth. 

It is comforting to note that liquidity is expected to be stable during the period of outflow of FCNR deposits,” Rego said. Mid-sized private lender Yes Bank’s Rana Kapoor expressed hope that with a food monsoon, RBI’s cautious stance on inflation would give way to accommodative actions in August.