Repo rates untouched, CRR hiked by 25 bps
RBI has gone in for another 25 bps hike in CRR to 8.25% in the annual policy announced today but has left repo and reverse repo rate untouched.Gainers & Losers
By INDIATIMES NEWS NETWORK |
NEW DELHI: Local factors have taken precedence and the Reserve Bank of India has left the repo and reverse repo rate untouched. The central bank has, however, gone in for another 25 basis points (bps) hike in CRR to 8.25 per cent in the annual policy announced on Tuesday. This will drain the system of Rs 8,000 crore of liquidity, effective May 24. There is also a threat of future CRR hike wrapped up in the policy announced by RBI Governor Dr Y V Reddy amidst expectations of a repo rate hike too.
RBI aims at bring down inflation to 5.5 pc in 2009. The inflationary pressures have been aggravated by food and oil prices. Mid-term objective of inflation remains at 3 per cent.
The money supply targets have been downgraded from 17 -17.5 per cent last year to 16.5 to 17 pc for 09. The policy aims at credit growth of 20 per cent in 2008. The bank is very optimistic on growth and had pegged GDP growth target at 8 - 8.5 per cent for 09.
UPS hime loan linit of 50 pc risk rate to Rs 30 lakh from Rs 20 lakh
Sensex at days high, 200 points up immediately after the policy announcement.
Opinion is split on whether it will trigger off a bank rate hike. Says ICICI Chief Executive Officer K V Kamath: "The move will shave off 10 basis points from the PNL of banks but they will not pass the burden on to the customers. There may be a lull in credit offtake but on the back of a strong investment pipeline and balanced corporate results, industry will be able to live with it. All in all it is not a back breaking policy"
RBI aims at bring down inflation to 5.5 pc in 2009. The inflationary pressures have been aggravated by food and oil prices. Mid-term objective of inflation remains at 3 per cent.
The money supply targets have been downgraded from 17 -17.5 per cent last year to 16.5 to 17 pc for 09. The policy aims at credit growth of 20 per cent in 2008. The bank is very optimistic on growth and had pegged GDP growth target at 8 - 8.5 per cent for 09.
UPS hime loan linit of 50 pc risk rate to Rs 30 lakh from Rs 20 lakh
Sensex at days high, 200 points up immediately after the policy announcement.
Opinion is split on whether it will trigger off a bank rate hike. Says ICICI Chief Executive Officer K V Kamath: "The move will shave off 10 basis points from the PNL of banks but they will not pass the burden on to the customers. There may be a lull in credit offtake but on the back of a strong investment pipeline and balanced corporate results, industry will be able to live with it. All in all it is not a back breaking policy"
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