RBI ponders on hiking rates

Submitted by Anuj Gupta on Tue, 12/22/2009 - 18:08

RBIThe Reserve Bank of India has been keeping close eye on the economic scenario and is expected to come up with some changes in the key economic parameters after observing the inflation figures for December.

The Union Government itself wants the Apex bank to be cautious regarding any change in interest rates especially on the Cash Reserve Ratio (CRR).

Finance Secretary Ashok Chawla said that inflation numbers would definitely have an impact over the instruments of RBI's monetary policy. The government has been drawing flak from opposing and political quarters for failing to arrest price rising, making it difficult for a common man to meet the both ends.

There is no liquidity crunch in the monetary system as of now but food inflation is significantly high at 20 per cent which limited the chances of RBI to act promptly.

Experts like Shankar Acharya, Member-Board of Governors, ICRIER Former Chief Economic Adviser and Rajat Monga, Group President - Fin Markets and Chief Financial Officer of Yes Bank also expressed that RBI may hike CRR in January despite high pressure of base effect of rise in prices of primary articles.


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