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Credit policy will not affect bond mkt: Kotak Mah Bk
Latha Venkatesh, banking Editor of CNBC-TV18 says that CNBC-TV18 poll was guessing a 50 bps hike in the cash reserve ratio (CRR.). Only a third of the respondent said that there would probably be a hike in the reverse repo.
Latha Venkatesh, Banking Editor of CNBC-TV18 says that CNBC-TV18 poll was guessing a 50 bps hike in the cash reserve ratio (CRR). Only a third of the respondent said that there would probably be a hike in the reverse repo.
"Yesterday's monetary policy macroeconomic review did sound extremely hawkish. The Reserve Bank of India (RBI) sounded fairly gung-ho on the growth. The word fragile growth has been taken out of the lingo and inflation fears were quite clearly raised. It does look like those people who had voted against a reverse repo perhaps would now do a rethink. So both instruments being used cannot be ruled out. This possibility was shared by many market participants yesterday. The market has prepared only for one of the instruments."
Bankers told CNBC-TV18 that even if CRR is raised, they have no leeway at all to raise rates because nobody is demanding money much these days. The bond markets may have a knee-jerk reaction. Even if both the instruments are raised, the reaction will be temporary because there are no more options left. The reaction will have to happen only in March or April.
Also read views of Mohan Shenoi, Head-Treasury at Kotak Mahindra Bank , on credit policy.
Latha Venkatesh, Banking Editor of CNBC-TV18 says that CNBC-TV18 poll was guessing a 50 bps hike in the cash reserve ratio (CRR). Only a third of the respondent said that there would probably be a hike in the reverse repo. 
