Abhishek Goenka (Founder & CEO, India Forex Advisors Pvt Ltd)on today's RBI Monetary Policy:
"Just after the announcement of the RBI Mid Quarter Policy Review, we saw the rupee getting weak by almost 15 paise. Today’s CRR cut by the central bank indicates that the inflation is still a concern for them as long as it is above the comfort level of 7% . They have taken this step in order to manage the liquidity issues that may arise on Advance Tax Payments for the September quarter. The CRR cut will improve overall credit disbursement and create a multiplier effect in the economy. The RBI seems little concerned due to excessive debt issues in European economies. Moreover, they feel inflation issues may still be around due to QE3 which may further increase commodity prices. We expect the rupee to move towards 54 plus levels during the Intraday with the base level of 53.00 holding firm in short to medium term."
(Source: Corporate Communications Team, India Forex Advisors Pvt. Ltd).