RBI need not react to bond yields, MSP for interest rate review: ASSOCHAM

The Reserve Bank of India should not over-react to the high yield  pressures of the bond market, along with the government promising a substantial revision in the Minimum Support Price for farmers and refrain from going in for any hike in the  benchmark policy lending rates when the Monetary Policy Committee meets on
February 7, the ASSOCHAM has said.

“Yes, some of the macro indicators, including pegging of higher fiscal deficit of 3.3 per cent for FY’ 2019 and 3.5 per cent of the GDP for the current fiscal, look difficult, but
reaction of the bond market to the budget -related would ease out soon, “said the  chamber in a Position Paper on the Financial Markets, post-Budget.

It said the concerns over the MSP leading to increase in retail inflation are exaggerated  for various reasons.

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