RBI working paper finds future monetary policy expectations have a larger impact on stock market volatility than rate announcements.
Equity markets are more influenced by future monetary policy expectations than rate announcements on the day of policy, according to a Reserve Bank of India (RBI) working paper. The study found that both the target (rate) and path (expectations) factors affected stock market volatility, with the path factor having a larger impact. The RBI research also noted that regulatory and development measures announced alongside the monetary policy can impact the stock market.
April 28, 2024
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