Expect another round of rate hike in May
Expect another round of rate hike in May
There is no surprise in the Reserve Bank of India’s (RBI) decision to hike its policy rates by 25 basis points (bps) each, but the tone of the three-page mid-quarter policy statement is more hawkish than most analysts would have expected. RBI has made no bones about the fact that the stubbornly high inflation rate is a grave concern and the central bank will persist with its anti-inflationary stance. This means it’s almost certain that RBI will go for yet another round of rate hike in May when it announces the annual monetary policy for fiscal 2012, because inflation is unlikely to come down dramatically by then.
To read all of Tamal Bandyopadhyay’s earlier columns, go www.livemint.com/bankerstrust
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