“The Monetary Policy Committee (MPC) surprised positively with a 35 bps cut given on the back of a continued growth slowdown. The MPC remains sanguine on inflation with projections up to Q1 FY2021 remaining well under 4% while it downgraded GDP forecasts to 6.9% with downside bias. The Governor also spoke about the importance of monetary policy transmission and the central bank’s support to keep adequate liquidity in the system. Steps to enhance the credit flows to NBFCs and classification of certain sectors to the priority sector lending through NBFC on-lending are also welcome. Going forward, given the rhetoric that supporting private investment remains “highest priority”, we do not rule out further accommodation if growth impulses continue to be slow.”