Wednesday, September 30, 2015

Repo Rate Cut, A view point


 Indian economy is on the growth trajectory. With the global turmoil pertaining to economic development and growth of markets, India has promised a great future for entrepreneurs across the world. The recent meetings and conversations of our honorable Prime Minister with the heads of global business forces clearly show how the world is looking at the India landscape. In such a promising scenario, a 50 bps rate cut from the table of RBI is like infusion of new vigor in the economy, which has the power to take the growth on a large platform. The sluggishness of the economy due to global woes is sure to be addressed by this positive move of the RBI governor.
The slump in the global commodity prices like petrol and tamable inflationary pressures made room for the rate cut. The inflationary pressure under control helped in addressing the need for lower repo which is sure to speed up the industrial growth and domestic consumption.

As far as investment scenario in the economy is concerned, the rate cut move by the governor along with the promised accommodative stance of the central bank promises a great future for the economy, which is experiencing favorable benefits due to international slow down. It is expected that the Indian bond market is set to see a substantive rally in the future, with great prospects for returns due to the positive move of the central bank.


Overall strength in the economy is the factor of strong demand in the country, and with the lowering of repo rates; the economy is also set to sail due to increased domestic consumption. With the lowering of the repo rates, the government bond yield is also on an all time low, promising a great rally for bond market in the future.   This creates a great room to invest in the debt market, with a promising return prospect in the future.

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