India Inc sees 25bps spike in policy rates on Nov 2: RBS survey
Majority of corporate India is expecting another round of policy tightening to the tune of 25 bps by RBI at its November 2 policy review and a further rise of the rupee, says an RBS India survey.
By PTI |
MUMBAI: Majority of corporate India is expecting another round of policy tightening to the tune of 25 bps by RBI at its November 2 policy review and a further rise of the rupee, says an RBS India survey.
The survey was carried out early this week among RBS' top corporate clients, banks, insurance companies and mutual funds to gauge the sense of corporate India in the run-up to the second quarter monetary policy review.
"Around 75 per cent of the 108 respondents are expecting a 25 bps hike in the repo and reverse repo (short term lending and borrowing rates) in the November policy review, while another 22 per cent expect a 25 bps spike in the CRR, which is the amount of money that banks park with the central bank to meet the prudential norms," RBS ( Royal Bank of Scotland) India Managing Director and head of markets Ramit Bhasin told newsmen while releasing the survey findings here.
Bhasin further said that companies are also bullish on holding onto the rupee, which has been rising against the US dollar for quite some time now, even if it goes past 44 mark. However, they expect the local unit to stabilise around 45 against the dollar, with most of the clients expecting the rupee to settle around 44.75 by this December and 44.25 by next March.
The industry expects the repo touching 6.25 per cent by December 2010 and March 2011 up from the current 6 per cent, and reverse repo at 5.25 per cent from the present 5 per cent during this time. But a minuscule 11 per cent see these rates remaining unchanged, Bhasin added.
The survey was carried out early this week among RBS' top corporate clients, banks, insurance companies and mutual funds to gauge the sense of corporate India in the run-up to the second quarter monetary policy review.
"Around 75 per cent of the 108 respondents are expecting a 25 bps hike in the repo and reverse repo (short term lending and borrowing rates) in the November policy review, while another 22 per cent expect a 25 bps spike in the CRR, which is the amount of money that banks park with the central bank to meet the prudential norms," RBS ( Royal Bank of Scotland) India Managing Director and head of markets Ramit Bhasin told newsmen while releasing the survey findings here.
Bhasin further said that companies are also bullish on holding onto the rupee, which has been rising against the US dollar for quite some time now, even if it goes past 44 mark. However, they expect the local unit to stabilise around 45 against the dollar, with most of the clients expecting the rupee to settle around 44.75 by this December and 44.25 by next March.
The industry expects the repo touching 6.25 per cent by December 2010 and March 2011 up from the current 6 per cent, and reverse repo at 5.25 per cent from the present 5 per cent during this time. But a minuscule 11 per cent see these rates remaining unchanged, Bhasin added.
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