RBI may raise repo, CRR rates
The Reserve Bank of India (RBI) may raise repo and CRR rates in the quarterly review of its credit policy scheduled for July 29.
By PTI |
MUMBAI: The Reserve Bank of India (RBI) may raise repo and CRR rates in the quarterly review of its credit policy scheduled for July 29, a senior mutual funds industry official said.
"Fiscal deficit is going to be under strain. Therefore, there could be a lot more money supply in the system and RBI will need to suck-out that liquidity to contain inflation. Therefore, I think the stance of the RBI would be to raise rates," SBI Funds Management's Chief Investment Officer (CIO), Sanjay Sinha, said on the sidelines of a seminar organised by the Indian Merchants Chamber (IMC) here on Tuesday.
Asked on the interest rate scenario, Sinha said, "interest rates will remain firm for sometime because it gets a lot of cues from the inflation numbers, which are unlikely to soften before the year-end."
When crude prices, very high at present, start softening, it would have a cascading effect on inflation and interest rates, which may show a downward trend, Sinha said.
The softening of crude prices will also have a positive impact on companies' profitability which are negatively impacted due to high raw material costs.
"Fiscal deficit is going to be under strain. Therefore, there could be a lot more money supply in the system and RBI will need to suck-out that liquidity to contain inflation. Therefore, I think the stance of the RBI would be to raise rates," SBI Funds Management's Chief Investment Officer (CIO), Sanjay Sinha, said on the sidelines of a seminar organised by the Indian Merchants Chamber (IMC) here on Tuesday.
Asked on the interest rate scenario, Sinha said, "interest rates will remain firm for sometime because it gets a lot of cues from the inflation numbers, which are unlikely to soften before the year-end."
When crude prices, very high at present, start softening, it would have a cascading effect on inflation and interest rates, which may show a downward trend, Sinha said.
The softening of crude prices will also have a positive impact on companies' profitability which are negatively impacted due to high raw material costs.
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"The softening of crude prices may take some time and I don't think the stock market will go down sharply from here," Sinha said. Download
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