Monetary policy: RBI to stay on course, says IDFC First Bank economist

With inflation remaining contained, RBI still has room for another 40 bps for Repo rate to go down

Worse than expected GDP numbers of 5 per cent for Q1FY20 have jolted all, including the RBI. The government has swung into action with a variety of measures that tended to ease the flow of funds and also announced some sector specific measures for housing and auto. The latest move came in the form of corporate tax rate cut. However, this is seen to have longer term benefits in terms of improved competitiveness vis-à-vis rest of Asia while it still might not lead to immediate investment intentions by manufacturers, given the low visibility of demand. 

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