Published on Fri, Mar 04, 2011 at 12:22 | Source : Moneycontrol.com
Updated at Tue, Mar 08, 2011 at 10:50
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RBI may up rates at its March 17 review meeting
Dealers in money market believe that the Reserve Bank of India is likely to hike interest rates in its forthcoming mid-quarter review of the policy on March 17 to tame inflation.
Dealers in money market believe that the Reserve Bank of India is likely to hike interest rates in its forthcoming mid-quarter review of the policy on March 17 to tame inflation. This is reflected in the action of a few foreign banks who bought forward dollars today anticipating a rate hike in the forthcoming policy meet.
Fears of a rate hike have been bolstered after crude oil price, which forms a sizable part of India's imports, crossed USD 100 per barrel mark recently. As a result, forward dollar/rupee premiums were slightly up today. Dealers expect the one-year forward premium to move in 5.99-6.08% band today.
Meanwhile, dollar/rupee non-deliverable forwards (NDF) rates slipped today as traders sold the dollar noting its weakness against most global currencies, including the rupee. Dealers feel the one-month NDF rates are expected to remain in 45.1000-45.20000 per dollar range today.
