25 basis point CRR hike likely: ICICI Securities
ET Now talks to Piyush Garg, Chief Investment Officer, ICICI Securities on RBI policy.
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| ET Now talks to Piyush Garg, Chief Investment Officer, ICICI Securities on RBI policy.
What do you think what is going to happen on April 20th when the Reserve Bank announces its annual credit policy?
I think almost a 40% probability on a 25 basis point CRR hike and something like a 70% probability on a 50 basis point repo, reverse repo rate hike in the April policy. There is a real need right now for the short-term rates in the economy to edge higher.
I feel that the reverse repo rate, which is right now at 3.5, may be in next three to four months should be actually raised to something like 4.5 or so in a shorter span of time.
CRR hike possible because there is a lot of an inflow happening in the economy and to sterilise that RBI needs to hike CRR. It also depends upon the amount of intervention that goes on in the forex market, which right now seems to be slightly less because the rupee seems to be appreciating. But last couple of days we have seen that rupee taking a support somewhere around 44.40 levels or so. So there is a chance that there could be a quarter basis point CRR hike to just sterilise the impact of the inflows that are happening and the RBI intervention that is happening.
What do you think what is going to happen on April 20th when the Reserve Bank announces its annual credit policy?
I think almost a 40% probability on a 25 basis point CRR hike and something like a 70% probability on a 50 basis point repo, reverse repo rate hike in the April policy. There is a real need right now for the short-term rates in the economy to edge higher.
I feel that the reverse repo rate, which is right now at 3.5, may be in next three to four months should be actually raised to something like 4.5 or so in a shorter span of time.
CRR hike possible because there is a lot of an inflow happening in the economy and to sterilise that RBI needs to hike CRR. It also depends upon the amount of intervention that goes on in the forex market, which right now seems to be slightly less because the rupee seems to be appreciating. But last couple of days we have seen that rupee taking a support somewhere around 44.40 levels or so. So there is a chance that there could be a quarter basis point CRR hike to just sterilise the impact of the inflows that are happening and the RBI intervention that is happening.
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