Jyotivardhan Jaipuria, Head Research, Bank of America Merrill Lynch has expressed his views on the growth in india and has alos expressed his free and frank opinion on RBI and inflation. Please read the transcript below:
We believe the bad news on growth will turn out to be good news for the market in the second half of the year. RBI at some point will move its stance from inflation containment to growth trajectory which will eventually lead to aggressive rate cuts. Also, inflation has to be really low enough to allow RBI to go for aggressive rate cuts. Typically when we get a cycle where rates begin to come down, markets initially rally which can be anywhere in the range of 20-30%. We have seen this in the previous cycles in India and globally too. I think somewhere in the second quarter of this year, RBI will start to ease rates and then we will have a series of rate cuts from RBI which will drive the rally in market. Hopefully along with that the government will be able to pass some reforms as well
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