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RBI may hike rate in future: Analysts

Mumbai: Terming the RBI action today as a “pleasant surprise”, analysts today cautioned that possibility of a rate hike in the future cannot be ruled out.  Urijit Patel committee's report on monetary policy would clear

PTI Updated on: December 18, 2013 21:49 IST
rbi may hike rate in future analysts
rbi may hike rate in future analysts

Mumbai: Terming the RBI action today as a “pleasant surprise”, analysts today cautioned that possibility of a rate hike in the future cannot be ruled out.  Urijit Patel committee's report on monetary policy would clear the air on RBI's future stand, they added.  


“The central bank maintained status quo on the grounds that a sharp rise in inflation in recent months has largely been driven by a surge in the prices of fruits and vegetables....,” a Crisil report said.  

But, it added, “the possibility of rate hikes during the remainder of the fiscal cannot be ruled out. The RBI has indicated as much in today's statement.” Some analysts noted that RBI has taken into account the weak GDP growth.

“The decision by the RBI not to hike the repo rate in this latest policy has come as a pleasant surprise to the market,” a research report by the State Bank of India said, adding that it shows the central bank's concern to address growth, and its anticipation that food inflation will come down rapidly from December onwards.

“Today's decision...was a seeming departure from the hawkish line drawn up in previous monetary policy statements... It was also a bit difficult to reconcile today's decision with the data flow we have seen in recent months, including the rising CPI and WPI inflation prints,” Chief Economist for India and ASEAN of HSBC, Leif Lybecker Eskesen said.

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