The bank welcomed the restoration of the LAF corridor at 50bps and also raised an important question about RBI supporting government borrowing.
Speaking to CNBC-TV18, Abhay Laijawala said the there will be a transition from monetary policy to fiscal policy for which the market is not prepared and expects the market to remain volatile with a downward bias for the near term.
The median estimate from a Reuters poll of economists put GDP annual growth at 7.4 percent in the quarter, just below 7.5 percent in January-March
All talks of the Reserve Bank of India ending the rate hike cycle came to a standstill on July 26, when the bank hiked key policy rates by 50 basis points as against the consensus expectation of 25 basis points.