Thursday, 16 March 2017

RBI's policy unlikely to be impacted by Fed rate hike

The US Fed rate hike is no surprise and may not impact RBI's policy next month as it had already factored in the global development and will be guided by local factors, said experts. The US Fed hike is as per the expected lines, which raised its benchmark interest rate for the second time in three months and there is forecast of two additional hikes this year, experts said. "RBI will not cut interest rate. Rate cut cycle is over as far as RBI is concerned," Crisil Chief Economist D K Joshi said. RBI is expected to stay put on the repo rate in its upcoming monetary policy next month because of rise in inflation both wholesale and retail.

The monetary policy review is due on April 5-6. Wholesale inflation soared to a 39-month high of 6.55 per cent in February and retail inflation inched up to 3.65 per cent due to higher food and fuel prices, justifying the RBI's move to hold rates at the last policy meet. 

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