1. YV Reddy, RBI governor stated that RBI's credit policy is based on forward-looking macro analysis and he further added that inflation pressures is likely to intensify and it is expected to be at current levels for the next few months.
2. RBI has hiked Repo rate by 50 bps and CRR by 25 bps. CRR hike will be effective form August 30. RBI aims to keep inflation under control and wants to bring it down to 5%.
3. It is no doubt that inflation monster needs t be tamed. It is no doubt that present hike will bringdown credit demand and same is in line with RBI directions for the banks to contain credit growth. However nothing to fear as India will continue to grow at 8% rate.
4. Effect RBI credit policy:
(a) Market considers RBI action as harsh.
(b) Banks will revise the interest rates.
(c) Banking and the real estate sector will be in down trend.
(d) Another 50 bps hike in repo rate and 75 bps in CRR is on card.
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2. RBI has hiked Repo rate by 50 bps and CRR by 25 bps. CRR hike will be effective form August 30. RBI aims to keep inflation under control and wants to bring it down to 5%.
3. It is no doubt that inflation monster needs t be tamed. It is no doubt that present hike will bringdown credit demand and same is in line with RBI directions for the banks to contain credit growth. However nothing to fear as India will continue to grow at 8% rate.
4. Effect RBI credit policy:
(a) Market considers RBI action as harsh.
(b) Banks will revise the interest rates.
(c) Banking and the real estate sector will be in down trend.
(d) Another 50 bps hike in repo rate and 75 bps in CRR is on card.
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