IS RBI Next Move CRR Hike?

Repo Rate hike, has come at the most inappropriate time. Some observers were unperturbed as the hike was only marginal – 25 bps – and the market had foreseen this as coming. But, I feel, investors would take it negatively as there is no certainty that there would be no further monetary tightening. From whatever economic data we are getting, it is becoming clear there would be more monetary plugging to tame inflation.

RBI has surprised the market in the past. And, this makes it difficult to take a call on whether the next move would come in the form of a CRR hike or Repo Rate hike. In a nutshell, looking at the current scenario, the prospects are not very encouraging – at least in the near term.