Rajan likely to hold rates Tuesday: Icra

Tags: News
Ratings agency Icra today said it expects Reserve Bank Governor Raghuram Rajan to hold the key rates on April 1, as inflation has shown considerable signs of cooling and is sniffing at the desired levels now.

"Consumer inflation eased to 8.1 per cent in February, close to the target of 8 per cent for the end of this calendar year as suggested by the Urjit Patel committee...Therefore, we expect a status quo on the policy rate in the upcoming policy review," it said in a note.

Icra said the unseasonal rains and hailstorms witnessed early March, which may put pressure on the inflation front, will not immediately have a bearing on the monetary policy. Additionally, there are also fears about a poor monsoon which can have a negative impact on the inflation trajectory, the agency said.

"At this stage, these concerns may be premature to necessitate a monetary response and instead warrant action from various levels of government in terms of preparedness to deal with the eventuality of an unfavourable monsoon," it said.

Rajan, who took charge last September, raised the rates at his first policy announcement, rightly foreseeing a pressure on the inflation front and increased it again--the third time since he took charge--in January when the market was expecting a pause.

It can be noted that even though the RBI has not formally adopted inflation targeting, it has gone public on targeting consumer price inflation down to 8 per cent by January 2015 and further down to 6 per cent by January 2016, as per the recommendations of the Patel committee.


  • EPFO would do well to have better risk management of available cash

    The Employees’ Provident Fund Organisation (EPFO) is apparently revisiting its decision to invest about Rs 6,000 crore in stocks this year.


Stay informed on our latest news!


Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs


Amita Sharma

Smart cities for the smart citizens

The 21st century has been spoken of as the urban ...

Zehra Naqvi

The prejudiced childhood

Sometimes the most unusual things can remind you of the ...

Gautam Gupta

To read about online videos, click here

ONce, not so long ago, exhorbitant costs had made sure ...


William D. Green

Chairman & CEO, Accenture