The Reserve Bank of India (RBI) has cut the Repo Rate by 40 bps to 4 per cent while it has reduced the Reverse Repo Rate by same percentage point to 3.35 per cent in its Monetary Policy Committee (MPC) meeting today. It also announced to extend the EMI moratorium by next three months up to August 2020, however, immediately after the RBI MPC meeting, Indian indices started to fall, that put some doubt over the RBI's rate cut decision. However, IIFL Securities director Sanjiv Bhasin is of the opinion that RBI has taken a right decision by providing liquidity into the markets. In fact, the fall in stock market is because of the Hong Kong tension going on between China and the US.

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Hailing the RBI MPC outcome Sanjiv Bhasin, Director, IIFL Securities said, "RBI has done the right thing by reducing the Repo Rate and Reverse Repo Rate by 40 bps. It will pump liquidity into the markets. In fact, the Indian economy is opening up as the aviation companies have started operations in the domestic markets while the IRCTC has started booking tickets for the Indian Railways that is also an important development in regard to the expected recovery into the Indian economy." Bhasin said that the recovery in the economy will be quite fast and RBI has done the right thing by negating out any kind of liquidity crisis hampering that recovery in the Indian economy.

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On why stock market fell immediately after the RBI MPC outcome Bhasin said, "The stock market fall has nothing to do with the RBI MPC decisions. It is mainly due to the Hong Kong tension going on between the US and the Chinese government." He said that Hong Kong factor has taken toll on majority of the global indices and Indian stock market fall is a part of it and we should be looking at it from this angle only.