Commodities will put pressure on margins: Sashi Krishnan, Bajaj Allianz

Sashi Krishnan, CIO, Bajaj Allianz Life Insurance, talks to ET Now on RBI credit policy and its impact on commodity.

Given the fact that global commodity prices are nowhere close to abating, even though the RBI has gone ahead and undertaken these moves, for most of the companies, particularly in the metals sector who source most of the raw materials from overseas, don't you believe that the worries and that the pressures will continue for these companies and that is why the repercussions are likely to be fairly severe?

I do agree with that. Given the fact that a lot of us are expecting QE3 to come in or it is not QE3, some sort of fiscal losing happening in the west, commodity prices are not going to come down dramatically.

China is slowing down, the world is slowing down which will have some impact but the financialisation of commodities has gone onto such a level that any fresh liquidity globally will find, some of it will definitely find, its way into commodities and commodities will not come off.

If you look at the RBI statement, RBI very clearly seems to indicate that the oil price impact is really something that you cannot dismiss very easily.

If you look at Brent, Brent has still remained in 110-112 in spite of everything that is happening. So commodities are going to be a bit of a worry for manufacturing in India and will put pressure on margins.