Rate hike seen in next quarter
COMMENTS
| Economic growth is supported by strong fundamentals, including increasing demand for a range of Indian goods and services from around the world. We don't see investments slowing anytime soon as there is still need for fresh spending in a range of areas from research in bio-technology to building new highways and ports. |
| There is risk of overheating in some sectors, such as construction, where price of land is booming as shopping malls, homes and office buildings proliferate. The possibility of rates being raised in the next quarter cannot be ruled out. Romesh Sobti |
| Gilt yields to rise marginally |
| RBI's economic assessment is positive and reinforces the expected 7.3% GDP growth forecasts for FY06. The underlying strength in the manufacturing sector coupled with the pickup in investment demand should fuel growth to a higher trajectory. |
| The stance towards interest rates is very welcome - not raising rates but being cautious is striking the right balance from a macro-economic perspective. Selective tightening of capital flows to capital market and real estate sector by enhancing risk weightage to 125% from 100%, is a sensible move to prevent creation of asset bubbles. |
| Despite no change in the reverse repo rate, we continue to expect gilt yields to rise marginally. Our view on hardening is influenced more by the strength in credit demand which should lead to reduced appetite for gilts. Amit Chandra |
| The RBI governor maintaining status quo on benchmark interest rates surprised a good section of money market participants, as factors cited for raising interest rates in the April monetary policy remained broadly unchanged. |
| The no-change decision in the review along with the arguments put forth makes one feel that the governor is comfortable in raising interest rates in semi-annual increments rather than quarterly unless underlying conditions have changed quite dramatically. |
| Benchmark 10 year bond yields should settle below 7% levels for now and gilt auctions over the next month should receive an enthusiastic response. Srinivasan Varadarajan, |
| The sustained stellar performance of the Indian corporate sector, buoyant capital markets and the economy's firm growth trajectory has prompted RBI to maintain status-quo. |
| In line with twin objectives of the monetary policy, RBI has not increased key interest rates, thereby, targeting an interest rate environment that would be favourable to maintaining price stability and macroeconomic growth. Vishwavir Ahuja, |
| The quarterly review was a challenge in the backdrop of conflicting signals. Domestically the economy is on an upswing, industrial growth is over 10%, exports of over 20%, strong foreign inflows, inflation at a 22-month low and indications of a revived monsoon. |
| At the same time there are heightened global uncertainties, with oil prices at higher levels, the hardening interest rate policy of the US and the exchange rate changes in China. |
| An unchanged policy is a reiteration of strong growth fundamentals of the economy. There is concern about the substantial overhang of liquidity despite unwinding in an orderly manner. Y M Deosthalee |