SENSEX NIFTY
Mar 15, 2012, 11.38 AM IST | Source: CNBC-TV18

RBI credit policy: Deficit & global commodity prices most important

Speaking to CNBC-TV18, Sonal Varma says that the policy is indeed a non-event, but it brings out certain key factors to watch out for.

The market elicited a mild reaction to the credit policy announcement of no change in rates. Speaking to CNBC-TV18, Sonal Varma says that the policy is indeed a non-event, but it brings out certain key factors to watch out for.

“Firstly, it shows that fiscal deficit and global commodity prices will be key factors that will govern decision making with regard to policy rate changes hence-forth,” she says.

“Reducing subsidy is not politically possible and is still in question, so the government does have a task at hand on how it plans to get its books in order,” she says.

Considering food and oil prices are not in our control, she believes that it is going to be difficult to put a leash on inflation. 

Nonetheless, Varma still expects a rate cut to happen in April.

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