RBI can hike interest rates: Rangarajan
The Prime Minister"s Economic Advisory Council Chairman C Rangarajan today suggested that the Reserve Bank of India (RBI) could reduce money supply and raise interest rates to tame the rising prices of food articles. - BHEL bags Rs 640-cr order from Adhunik Power - Indiabulls Financial ends life insurance JV with Sogecap - AV Rajwade: OTC vs exchange-traded">AV Rajwade: OTC vs exchange-traded - UCO Bank to open 100 new branches - Definition of liaison offices of law firms still under a cloud - Bond yields to remain high "If price decline does not happen in December, than early steps could be taken. RBI could increase interest rates...Preferebly could reduce liquidity by acting on CRR", he said. Rangarajan was responding to a question, what measures the RBI should take to moderate food inflation that climbed to a 10-year high of 20 per cent during the first week of December, driven mainly by higher prices of potato, other vegetables and pulses. Making a case for reduction in money supply, Rangarajan, also a former Reserve Bank Governor, said the apex bank could raise the Cash Reserve Ratio (CRR), the portion of amount that banks are required to keep with the central bank. Through a slew of measures, the RBI has injected liquidity into the system to help the cash-starved industry to combat the adverse impact of the global financial meltdown since September last year. The RBI Governor D Subbarao had met finance minister Pranab Mukherjee on December 18, fuelling speculation that the monetary policy would be tightened. The RBI in October had raised the Statutory Liquidity Ratio (SLR), the portion of funds that banks are required to park in government securities, to 25 per cent, though it retained the CRR at 5 per cent. The central bank would come out with its next monetary policy statement on January 29.Pay day advance commented:
If they are hiking then there is reason that the whole economy of the world is suffering and therefore they also need to increase the rates
24.08.2011
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Rangarajan has said that the RBI can hike interest rates and this news is of great importance for common man who has to work hard to make ends meet
28.09.2011
Family Office commented:
The RBI increased Repo rates to 8% (from 7.50%), a 50 basis point increase. Repo is what banks pay to borrow overnight from the RBI, a key rate that is generally the floor for inter-bank lending rates and thus interest rates in the system.
18.10.2011
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C Rangarajan today suggested that the Reserve Bank of India (RBI) could reduce money supply and raise interest rates to tame the rising prices of food
20.10.2011
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31.10.2011
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31.10.2011
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26.11.2011
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21.02.2012