New Delhi, Apr 6 (UNI) Experts and policy watchers on Thursday welcomed the decision of the Reserve Bank of India (RBI) to hit pause button in the repo rate hike and keep the policy rate unchanged at 6.5 per cent.



In a statement, Rajiv Sabharwal, MD & CEO, Tata Capital Ltd, said, 'The market has already seen a 250 basis point increase in repo rates beginning in May 2022. Considering the turmoil in the Western economies and in India, no change in the repo rate is a good decision given the inflationary pressures. This will accelerate the growth momentum in the economy. This will probably also allow firms to effectively stabilise their supply chains and operations. This showcases RBI’s commitment to support sustained economic activity given the inflationary pressures.'

Rajiv Agarwal, Operating Partner (Infrastructure), Essar and Managing Director, Essar Ports, said,"We appreciate the RBI's decision to keep the repo rate unchanged amidst the persistent inflationary pressures. It will spur investment and consumption resulting in industrial and economic growth of the country."



Manish Kothari, President & Head- Commercial Banking, Kotak Mahindra Bank Limited, said, “Very balanced and prudent approach taken by RBI in deciding to pause, keeping in mind both inflation control (price stability) & supporting GDP growth (financial stability). At the same time, reiterating & reinforcing the fact that sticky inflation & international markets will continue to be closely watched by them for future decisions – hence, keeping their options open.'



Narinder Wadhwa, President, Commodity Participants Association of India, said, 'As expected RBI has taken a pause in policy rate decision which is welcome move. Foreign currency reserves reaching again to 600 Billion level is encouraging news. We expect extended pause & feel interest cycle is done.'



'The RBI’s “surprise” pause on the repo rate in April is completely in line with our expectation. In fact, the 6-0 voting in favour of a pause is stronger than our expectation. With the likely softening of CPI to low- to mid-5% levels in the coming month, the current repo rate of 6.5% implies that India’s real policy rate will hover around 1% during 2023-24, while maintaining a policy rate differential of about 1.5% with the US. This clearly helped the decision of a pause on the repo rate,' said Siddhartha Sanyal, Chief Economist and Head of Research, Bandhan Bank.



Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities,' The decision to pause at 6.5% was a positive surprise. We believe the RBI is concerned on the uncertainty from global financial markets and the pause is reflective of this concern. We view this policy as a hawkish pause. The tone of the policy remains concerns on inflation, especially core inflation and remains focused on reaching the 4% target over the medium term. The RBI remains comfortably on the growth front, for now. We believe the risks to this outlook is skewed towards the downside. We expect the RBI MPC to remain on an extended pause. Scope for further hikes is limited given our growth-inflation outlook and impact of the past rate hikes on the same."



Rating agency CRISIL, said, 'While the phase of aggressive rate hikes may be behind us, the aftereffects on financial conditions, along with any upside to inflation, would be the risks to watch for in the new fiscal year.”



Subhrakant Panda, President, FICCI said, “The pause in policy repo rate by RBI is a welcome move given the evolving macro-economic and financial markets scenario. The renewed phase of turbulence that Central Banks are grappling with globally given developments in the banking sector, geo-politics and slowdown in growth & trade flows warranted a prudent response which RBI has delivered.”

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