RBI likely to reduce repo rate in Jan 2013 policy: ICRA
The Central Bank is expected to ease liquidity in the near term through open market operations and likely to reduce the repo rate in the January 2013 policy: Naresh Takkar, MD & CEO, ICRA Ltd.
December 18, 2012 / 16:19 IST
By Naresh Takkar,
MD & CEO, ICRA Ltd
RBI's mid-quarter monetary policy reviewContrary to our expectations, the Central Bank maintained the CRR at 4.25% of NDTL in the mid-quarter review. Given the temporary liquidity stress arising from advance tax outflows and the likely persistence of the wedge between deposit mobilisation and credit offtake in the remainder of FY13, we expect the Central Bank to ease liquidity in the near term through open market operations.The guidance provided by the RBI indicates a clear shift in its stance towards boosting growth in the coming months. Notwithstanding the spike in October 2012, industrial growth is expected to remain sluggish at around 3-3.5% in Q3FY13. If headline and core WPI inflation remain largely similar to the initial print for November 2012, the RBI is likely to reduce the repo rate in the January 2013 policy.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
