Today Morning RBI surprised every one by not reducing the interest rate and CRR. Although CRR reduction was not expected Repo rate cut of 25bps was expected by all stake holders. We all understand the dilema of RBI to balance between Growth and Inflation . Since last four quarter the GDP growth rate of India has been decreasing and Industry was expecting that RBI will cut the rate to boost the Economy . Inflation data released last thursday for the Month of May was higher at 7.55% as against 7.32% in April . This upward trend of Inflation rate might be the key reson for RBI not to reduce the rate .
Both stock Market and Forex market reacted negatively to this announcement of RBI. RBI still maintain the FY 13 growth rate at 7.3% . The latest move of RBI will impact the mood of the market for sometime . RBI rate cut if done might not have boosted the Economy as the prime reason of low investment is policy pause. Although no change done for the time being rate cut upto 75bps is expected by the end of FY13.
So Repo rate, Reverse repo rate and CRR stand at 8% , 7% , 4.75% respectively as on date .
Both stock Market and Forex market reacted negatively to this announcement of RBI. RBI still maintain the FY 13 growth rate at 7.3% . The latest move of RBI will impact the mood of the market for sometime . RBI rate cut if done might not have boosted the Economy as the prime reason of low investment is policy pause. Although no change done for the time being rate cut upto 75bps is expected by the end of FY13.
So Repo rate, Reverse repo rate and CRR stand at 8% , 7% , 4.75% respectively as on date .
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