Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARDS :: due date for vat payment :: VAT Audit :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: articles on VAT and GST in India :: empanelment :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: VAT RATES
« News Headlines »
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17
 Non-taxing GST apps to make filing income tax return less painful

RBI likely hike repo rate by 25 bps
March, 14th 2011

A sluggish industrial output growth and the feared fallout of the political turmoil in West Asia and North Africa and the devastating earthquake in Japan on the Indian economy are likely to play on the Reserve Bank of India?s mind while it continues with its ?struggle? to combat its chief prey ? inflation ? through hiking policy rates and curbing demand.

The central bank would most likely hike repo rate by 25 basis points at its forthcoming mid-quarter monetary policy review on March 17, a poll of economists, bankers, and bond dealers conducted by ET showed. One basis point is one-hundredth of a percentage point. Repo rate is the rate at which the RBI lends to banks against securities.

Last year was the most action-packed for the Indian financial market this decade in terms of policy actions. The RBI raised policy rates seven times since March 2010 with a hike of 175 basis points in repo rate and 225 basis points in reverse repo rate.

Admitting that the central bank is struggling in its dual objective of taming inflation and promoting growth, Governor D Subbarao had recently said, ?For inflation management we have to raise policy interest rates. For protecting, promoting, and preserving recovery we need to keep interest rates low, so there is tension between raising policy interest rates and keeping them low.?

Indicating more rate actions from the RBI, the finance ministry?s Chief Economic Advisor Kaushik Basu said policy initiatives to bring down inflation will continue a couple of months into the new fiscal year. Government data released last week showed food inflation for the week to February 26 slowed to a three-month low of 9.52% year-on-year. This compares with a 10.39% increase in the previous week. Annual headline inflation in January was at 8.23%, well above the RBI?s perceived comfort zone of 4-5% and compared with its March-end target of 7%. Government data due on March 14 is expected to show February headline inflation to have moderated to around 7.8%.

However, some, such as State Bank of India , don?t see any rate action from the RBI at its mid-quarter review and expect it to be a non-event. ?Inflation is coming down and industrial production is slow. Rising oil prices and the crisis in Japan ? all these factors might affect our growth in some way. So we don?t expect any changes in interest rates this time. Even if there is a 25-bps rate hike, it will not substantially affect the secondary interest rates,? said Anjan Barua, deputy managing director & group executive (global markets), State Bank of India. India?s Index of Industrial Production rose 3.7% in January, marginally higher than the 2.53% rise a month earlier, which many experts feel may not be adequate to meet the 8.6% GDP growth target for the fiscal year-end.

Raising concerns that domestic demand growth is likely to slow, brokerages such as Citi and Morgan Stanley recently scaled down their GDP growth forecast for India to 8.4% and 7.7%, respectively, for the next fiscal year. In comparison, the government in its Budget last month said the economy is expected to grow at 9%, plus or minus 0.25%, in 2011-12.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions