The central bank said that with the improving growth outlook, monetary and fiscal exit measures have started, but warned that an ill-planned exit from monetary and fiscal stimulus would mar growth.
Manish Sonthalia, equity head at Motilal Oswal, said, "As far as hike in CRR, reverse repo and repo rate is concerned, the market already has well discounted on this front. We expect the hike to be around 50 basis points across all rates. Goldman Sachs issue will have its negative impact on the market this week."
“I think the primary driver for RBI’s policy will remain what it can do with inflation rate and how quickly it can bring it down, especially non food inflation and I think as long as that keeps sticking up and that does not show signs of coming down soon, I think that will be the driver for RBIs policy,” says JP Morgan Chief Economist Jahangir Aziz.
The Reserve Bank of India will shortly issue Rs.50/- denomination banknotes. Except for the change in the inset letter, the design of these notes to be issued now is similar in all respects to the banknotes in Mahatma Gandhi Series � 2005, with additional / new security features issued on August 24, 2005. All banknotes in the denomination of Rs.50/- issued by the Bank in the past will continue to be legal tender.
The hike in CRR, which will come into effect from April 24, will absorb Rs 12,500-crore excess cash from the banking system. Banks have already indicated that they may not pass on the increased cost to the borrowers immediately as liquidity still remains sufficient in the system.
Index heavyweight Reliance was trading at Rs 1,066.25 up 0.4% from its previous close of Rs 1,061.95. Hindustan Lever was trading at Rs 225.00 up 0.11% from its previous close of Rs 224.75.
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