RBI may keep key rates unchanged: Macquarie Research
by 22, October, 2009 0 |
According to Macquarie Research, the Reserve Bank of India is likely to keep its benchmark lending and borrowing rates unchanged in its monetary policy review next week, but may start hiking them from April 2010.
In their report, Macquarie research analyst Rajeev Malik said, “We maintain that the RBI would keep rates unchanged next week, and probably begin hiking them from April 2010. The RBI can also keep the cash reserve ratio (the amount of funds that banks have to park with RBI) unchanged on October 27, but may hike it before the next review in January 2010.” RBI will announce its mid-yearly credit policy on October 27. According to the research firm, premature tightening would attract more capital inflows, which could complicate monetary and rupee management.
At present, the cash reserve ratio (CRR) stands at five per cent, while the repo rate (the rate at which banks borrow from RBI) is at 4.75 per cent and the reverse repo rate (the rate at which RBI borrows money from banks) stands at 3.25 per cent. The research firm said that credit offtake in the country remained less than desired while the trend in loan-deposit ratio was uninspiring.
