Mar 15, 2012, 09.18 AM IST | Source: CNBC-TV18

RBI credit policy: See no rate action, says CNBC-TV18 poll

The RBI will announce the mid-quarterly review of its monetary policy on Thursday. CNBC-TV18 poll of bankers and economists shows that 70% of the respondents expect a no-action credit policy.

The Reserve Bank of India will announce the mid-quarterly review of its monetary policy tomorrow. CNBC-TV18 poll of bankers and economists shows that 70% of the respondents expect a no-action credit policy from the central bank tomorrow, primarily because they expect that the Reserve Bank will want to see one more month.

However, 30% of bankers, economists expect a rate cut in the credit policy.

The RBI is aware that railway freight rates, cement and steel prices have risen in March and fuel prices are yet to be passed on. Global international crude prices have not at all been adjusted for in the domestic WPI number. More importantly, the Reserve Bank will want to see the fiscal deficit number before it makes any decisive move of cutting rates. Thats the reading of the market.

Meanwhile, headline inflation came in higher than expected at 6.95%. Higher vegetable and other food prices contributed to that increase. This even as core inflation slowed a bit.

Clearly, the number of believers in a rate cut rose after the inflation numbers. Bond prices and banking shares rose sharply after the inflation number were out. But there are fair numbers of sceptics who believe RBI wont budge till the budget reveals the fiscal deficit picture.

Let's take a look at the poll results:

Will the RBI cut repo rates? And if yes, by how much?

a. Zero ---- 70%

b. 25 bps ---- 20%

c. 50 bps ---- 10%

Will there be another CRR cut? And if yes, by how much?

a. Nil ---- 90%

b. 25 bps ---- 10%

c. 50 bps ---- Nil

RBI credit policy: Don't see rate cut till April, say experts

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