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RBI likely to reduce the repo rate January 2013 :ICRA

India Infoline News Service/ 17:46 , Dec 18, 2012

Reserve Bank of India (RBI) in its mid-quarter review of monetary policy kept policy rates unchanged on Tuesday.

Commenting on RBI Policy, Naresh Takkar, MD & CEO,ICRA Ltd said “Contrary to our expectations, the Central Bank maintained the CRR at 4.25% of NDTL in the mid-quarter review. Given the temporary liquidity stress arising from advance tax outflows and the likely persistence of the wedge between deposit mobilisation and credit off take in the remainder of FY13, we expect the Central Bank to ease liquidity in the near term through open market operations.


The guidance provided by the RBI indicates a clear shifting its stance towards boosting growth in the coming months. Not withstanding the spike in October 2012, industrial growth is expected to remain sluggish at around 3-3.5% in Q3 FY13. If headline and core WPI inflation remain largely similar to the initial print for November 2012, the RBI is likely to reduce the repo rate in the January 2013 policy.”

Reserve Bank of India (RBI) in its mid-quarter review ofmonetary policy kept policy rates unchanged on Tuesday.


RBI decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.25% of their net demand and time liabilities; and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0%.

Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0% , and the marginal standing facility (MSF) and the Bank Rate at 9.0%.



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