RBI may raise CRR by 0.5%: Macquarie

MUMBAI: RBI may raise the cash reserve ratio by 0.5% on or before its monetary policy review on January 29 to flush out excess liquidity from the system, research group Macquarie Securities said on Friday.

RBI would be concerned about excess liquidity, high food inflation and rise in international commodity prices and would like to normalise its monetary setting, Rajeev Malik, economist at Macquarie, said in a note.

"RBI would prefer to normalise the monetary setting following the aggressive easing (of interest rates) to cushion the economy from the international financial crisis,” he said, adding that the bank is likely to effect a 0.5 per cent hike in crr to 5.5 per cent.

Macquarie has suggested that rbi should take steps to squeeze out excess liquidity from the domestic money markets before raising the benchmark borrowing and lending rates.