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Markets hope for some rate relief after Thursday’s policy

This article was posted on Jun 13, 2011 and is filed under Market News

The market has already factored in a 25 basis points (bps) increase in key policy rates on Thursday, when the Reserve Bank of India (RBI) announces its mid-quarter review of the monetary policy.

But with interest rates already shooting through the roof, bankers expect RBI to press the pause button after that.

With inflation staying above RBI’s comfort zone, economists and bankers said it was likely to further tighten the policy. “We are expecting a 25 bps increase. The market is divided between a pause and a 25 bps increase. There are some people who feel the slowdown is acute enough to reassess the strategy of tightening monetary policy,” said Samiran Chakraborty, regional head of research, Standard Chartered Bank. For more visit: Business Standard

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