RBI likely to hike CRR , Repo Rate and Reverse Repo Rate

Ahead of the Reserve Bank’s quarterly monetary policy, RBI  is likely to signal interest rate hikes to suck out liquidity from the market and check prices from spiraling further.  Reserve Bank may also raise the amount banks need to park with the apex bank (CRR) by up to 50 basis points.  Reserve Bank could raise the short-term borrowing (reverse repo) rate by 25 basis points. Reserve bank is likely to hike cash reverse ratio by up to 50 basis points.

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Happy thanksgiving to Indian GDP

When the market started and I was listening CNBC TV Suddenly around 11 am Udayan Mukherjee of CNBC TV jumped of his seat and shocked to find the GDP numbers of India. Within few minutes India was into a roller coaster ride. July-Sept GDP up 7.9%. Economist and all market speculators are having their eyes coming out of shock. Before I get into further analysis just a quick look into the break up of India GDP figures.

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RBI expcted to keep key policy rates unchanged in the monetary policy review

The Reserve Bank of India might change its bias towards softening interest rates into a more cautious outlook but is expected to keep key policy rates unchanged in the monetary policy review on Tuesday. At the same time, banking sources close to the development said the central bank could raise its growth target from 5-6 per cent to 6.5 per cent to accommodate the impact of an improving monsoon and the growth impetus provided through various fiscal and monetary stimulus packages earlier in the year.

The cautious outlook on interest rates is primarily to accommodate rising inflationary expectations in the economy.

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