Press Esc to close
Tuesday 02 September 2014
News updated at 12:18 PM IST
Weather
Max: 27°C
Min : 20°C
In Bangalore
Generally cloudy

RBI likely to keep key policy rate unchanged on Jan 28

New Delhi, Jan 26, 2014, (PTI)
The Reserve Bank is likely to maintain status quo in its third quarter monetary policy review on Tuesday despite the clamour for cutting rates to boost sagging growth in view of some moderation in inflation. Reuters File Photo.

The Reserve Bank is likely to maintain status quo in its third quarter monetary policy review on Tuesday despite the clamour for cutting rates to boost sagging growth in view of some moderation in inflation.

"I think status quo will be maintained by the RBI," Oriental Bank of Commerce Chairman and Managing Director S L Bansal told PTI.

Echoing similar views HSBC India country head Naina Lal Kidwai said: "I believe that RBI will keep interest rate unchanged in this policy review.

"The message to the industry is quite important to make sure that we can get interest rates to at least plateau, if not come down."


RBI is scheduled to announce third quarter review of monetary policy on January 28.According to ICRA managing director Naresh Takkar it is expected that RBI would retain the repo rate in this review even though inflation eased in December.

With inflation easing, there is renewed demand from the industry for a reduction in interest rates.

However, SBI said in a report: "RBI may keep rates steady in January 2014 review and wait for more information, particularly on trajectory of food inflation, before deciding next course of policy action because core inflation has remained more or less flat in December 2013."

Wholesale inflation declined to a five-month low of 6.16 per cent in December as food article prices cooled.

Prices as measured by the Wholesale Price Index, gained at the slowest pace since July 2013, when inflation was 5.8 per cent. In November, WPI increased 7.52 per cent, the fastest pace in 14 months.

Retail inflation also eased to a three-month low of 9.87 per cent.

However, Planning Commission Deputy Chairman Montek Singh Ahluwalia said recently controlling inflation should not be the only target of central banks.

"My feeling is that central banks have to look at multiple targets. Central banks should not look only at inflation target...," he had said.

After hiking policy rate in two consecutive policies, the Reserve Bank kept key policy rates unchanged in December 18 review on expectations that wholesale and retail inflation would ease.

The central bank had increased the key policy rate (repo) twice between September and November to check inflation. The rate is currently 7.75 per cent. The cash reserve ratio is pegged at 4 per cent. 

Go to Top

Photo Gallery
President Pranab Mukherjee grants degree to a student at the 14th convocation of the University...

President Pranab Mukherjee grants degree to a student at the 14th convocation of the University...

Fireworks on the occasion of 410th installation anniversary of Sri Guru Granth Sahib, the holy...

Fireworks on the occasion of 410th installation anniversary of Sri Guru Granth Sahib, the holy...

Left Front activists take part in a rally to observe anti-imperialist day in Kolkata on...

Left Front activists take part in a rally to observe anti-imperialist day in Kolkata on...

Flood water flows through Srisailam dam after its four crest gates were opened in Kurnool on...

Flood water flows through Srisailam dam after its four crest gates were opened in Kurnool on...

BJP president Amit Shah during a visit to Sree Padmanabhaswamy temple in Thiruvananthapuram on...

BJP president Amit Shah during a visit to Sree Padmanabhaswamy temple in Thiruvananthapuram on...

Prime Minister Narendra Modi shakes hands with Japanese Minister of Foreign Affairs Fumio...

Prime Minister Narendra Modi shakes hands with Japanese Minister of Foreign Affairs Fumio...

Actress & BJP MP from Chandigarh Kirron Kher speaks during a seminar on...

Actress & BJP MP from Chandigarh Kirron Kher speaks during a seminar on...

Prime Minister Narendra Modi and Japan's Prime Minister Shinzo Abe makes a toast during a banquet...

Prime Minister Narendra Modi and Japan's Prime Minister Shinzo Abe makes a toast during a banquet...

Congress president Sonia Gandhi prays in a temple during a visit to her constituency Rae Bareli...

Congress president Sonia Gandhi prays in a temple during a visit to her constituency Rae Bareli...

Congress president Sonia Gandhi in a village hut during a visit to her constituency Rae Bareli on...

Congress president Sonia Gandhi in a village hut during a visit to her constituency Rae Bareli on...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523