Mid-quarter review of Monetary Policy 2010-11: Emkay

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Banking

Mid-quarter review of Monetary Policy 2010-11

n     Reserve Bank of India (RBI) raises repo and reverse repo rate by 25bps each to 6.75% and 5.75% respectively, leaving the other rates unchanged

n     RBI continued to be worried about inflationary pressures, though for the first time in last many policies, also showed concern on the growth front

n     Upped inflation estimates to 8% for March 2011 from 7% earlier, though kept GDP growth estimates for FY11 unchanged at 8.6%

n     Inflationary concerns will continue to remain a dominant policy concern and therefore we expect the RBI to hike by another 50 – 75 bps in FY2012