Mumbai: The RBI is likely to hike its cash reserve ratio, the amount banks have to park with the central bank, by 0.5 per cent later this month and may start increasing policy rates from March, HSBC said on Wednesday.
"Our own view remains that we will see a 0.5 per cent hike in the CRR at the January meeting, with policy rates only rising from March at the earliest," HSBC Senior Asian Economist, Robert Prior-Wandesforde said in a statement on Wednesday.
The RBI is scheduled to announce the quarterly review of its annual monetary policy on January 29.
HSBC, in a survey, also said that the Business activity index of Indian companies rose to 57.4 in December.
"As with the manufacturing output index, the services equivalent showed an encouraging bounce in December, suggesting that the economy is picking up steam and that the surprisingly strong July-September GDP release was no flash in the pan," the survey said.