No immediate pressure on interest rates: HSBC
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Last Updated: Thursday, January 21, 2010, 15:48
  
New Delhi: Foreign lender HSBC today said that there is no immediate pressure on lending rates even if the Reserve Bank squeezes money supply to contain inflationary expectations.

Calling for retaining fiscal stimulus to carry forward the growth process, HSBC India head Naina Lal Kidwai told reporters that interest rates could only gradually rise in the next six months.

"That (interest rate rise) is going to happen next month? No. In the next six months... gradual," she said on the sidelines of a micro-finance conference here.

RBI is slated to come out with its third quarter monetary policy on January 29.

She added that inflation is a concern and will be watched, however, monetary policy is not the only way to contain this.

Wholesale price inflation rose to 7.31 per cent in December from 4.78 per cent in the previous month, higher than the 6.5 per cent level by this fiscal-end projected by the RBI.

Kidwai added that there is lot of liquidity in the banks.

"Can some of these (liquidity) be mopped out? Yes... A small Cash Reserve Ratio hike for example of 0.25 per cent would mean just about Rs 8000 crore going out of the system...it may signal an important change," she added.

Yesterday, the country's largest lender, SBI, had said that interest rates are likely to remain stable as liquidity is surplus.

PTI


First Published: Thursday, January 21, 2010, 15:48


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