The 2nd quarter monetary policy review by Reserve Bank of India is anticipated to increase further the main policy rates. Bankers say that the repo rate may go up from the current 5.75% to 6% but a hike in cash reserve ratio (CRR) is not anticipated.
Ernst & Young analysts maintain that the monetary contraction methods will still be adopted by the central bank and policy rates may go up 25 basis points. But experts state that the increase will not affect the market and the market can absorb this increase as well. They also opine that this increase may not introduce any big change in the home and car loan segment thus impacting the retail borrower.
Robin Roy of Pricewaterhouse Coopers and experts from Edelweiss also believe in the same theory.
But Abheek Barua, chief economist of HDFC Bank says, there might not be any change in the policy rates during this quarter review of the monetary policy. “I don’t expect any hike in repo rate till October given the tight liquidity situation,” he said.