There is nothing new to contain inflation which will only go up once the impending oil price increase is announced. Increase in CRR is not going to contain inflation but affect Bank's second quarter performance. With money supply freely available, good borrowers can count on other sources than Bank funds as Banks will be forced to increase lending rates following increase in CRR
RE:RBI 's Mid Term Policy
by N.P.Sharma on Jul 31, 2007 03:33 PM Permalink
There is a immediate need to further upscale the Home loan rates by about 1% to contain the prices of Rent rates ,Steel , Cement & Land Rates . Only investors were buying the property when interest rates were close 7.5% .... Now its good time for real users to look for property .
The proices of property is hovering at 200% compared to prices in 2005 . Immediate correction is awaited .
i think RBI has started following the steps of BoE to give surprises. the hike in CRR by 50 bps is hardly expected by the market. RBI has given closer look to the liquidity in the money market and has taken steps to reduce this high liquidity (call money is hovering below 0.50% for a quite a long time)
RE:unexpected hike
by milind vora on Jul 31, 2007 07:59 PM Permalink
I guess u are not part of the market, it was very much expected that the RBI would hike CRR to suck in some amount. The removal of 3000 cap was also an expected move
