The Reserve Bank of India’s decision to raise the cash reserve ratio (CRR) by an unexpected 75 basis points to 5.75 percent has invoked mixed reactions among the country’s leading bankers and industrialists.
Concerned over high inflation rate, fuelled by rising food prices, Finance Secretary Ashok Chawla Friday said the steps by the central bank to curb liquidity were adequate and assured that interest rates will remain intact.
Inflation is likely to peak at 8.7
per cent by the end of March and the Reserve Bank is expected
to begin tightening its monetary policy from the January 29
review itself, says the Bank of America Merrill Lynch (BofAML).