In what proved to be a rollercoaster policy speech that likely left even the most seasoned bond traders dizzy, Reserve Bank of India Governor Sanjay Malhotra did three key things. First, a clever tactical move to leverage the current phase of low inflation to frontload rate cuts through a big bazooka of 50 basis points instead of staggering the cuts over multiple policies.Second, issuing a caveat that the central bank had not thrown caution to the winds and pivoted entirely towards growth. Hence, the switch back to a “neutral” stance and the message that the RBI was done with most of its heavy lifting in getting growth back on track.
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