New delhi: Morgan Stanley on Friday said that it expects the rbi to take some additional liquidity measures measures before end-march and another cut of 25 Basis points cut in the repo rate in the centi 25 Basis Points to 6.25 per cent While it retained the stance at neutral earlier in the day.
In a unanimous Vote, the mpc embarked on a rate Easing Cycle, with a 25 BPS Rate Cut, “In Line With Our and Consensus Expectations”. In addition, the mpc retained the stance at neutral, as they “remain unambigured Amics, The Morgan Stanley Report States.
These growth-inflation dynamics open up policy space for the MPC to Support Growth, While Remining Focused on Aligning Inflation with the target. While The Policy Today did not announs any additional liquidity-enhancing measures, the governor’s statement allded to providing “Safecient” LIQUIDITY and Taking “LICING” Aid.
The Rate Easing was in Line With Expectations, Against the backdrop of a weaker-nan-nticipated trend in domestic growth and modeling inflation. Further, The RBI has used its levels to add liquidity (rs1.5 lakh current) while also indicating a Softer Approach Towards Some impemed regulations.
“We believe that RBI is Supporting Growth Through Easing Rates, Softer Regulation (Deferring New Guidelines) and Providing Sufficient Liquidity (Expect Addressal Steps). ril policy review, which may likely be the last cut , “The report states.
It further states that RBI is expected to proactively manage liquidity and take up some additional measures (Omo purchases/fx swaps) as the LIQUIDITY Deficit Rices End-Marsch. “We see risk of a longer rate cut cycle, if growth recover is lacquel
To support its point, the report referred to the RBI Governor’s statement highlighting that on the regulatory front, there is a trade-of-of between stability and efficiency which should be heard. He said that this trade-off will be kept in mind while formulating regulations.