The RBI has taken a complete U-turn in its recent monetary policy, the focus gradually shifting from growth to inflation targeting, Axis MF noted.
The new path charts a return to pre- pandemic monetary policy – ensuring system liquidity to go back to neutral from the current Rs 3- 4 lakh crore net liquidity position. Additionally, the corridor between MSF and LAF is reduced to 50 basis points from the current 90 bps and eventually the repo rate will be raised in a calibrated manner.