RBI Needs to be Careful in Future

April 4, 2007	(Be the first to rate this story!)  Loading ...
Print This Story   Email This Story Subscribe Newsletter

The Indian Economy is zooming away in the wake of current scenario witnessing the ongoing developments, but the Reserve Bank of India (RBI) has taken a more stringent attitude towards all.

The apex bank has raised interest rates and squeezed liquidity. Consequently, all the banks added to their lending rates. Experts see this step to bring a drop in growth from the current nine per cent levels to even below eight per cent.

In India, more and more people are turning towards mortgage and there is a significant increase in the plans to put new plants and machinery. This will lead to the less top line growth. Also, earnings are going to be downgraded by the end of 2007 and that will justify the under performance of this market which may continue, says Adrian Mowat from JP Morgan.

The industrialists are not worried about the current rates. They just wish for the RBI to tread meticulously in future from hereon.

The situation is not same as it was in 1997. The country is witnessing a fast flourishing economy, healthy exports with the current growth rate of 11 per cent. This only a liquidity-led inflation, which the RBI is lightening, says Bajit Ranade, Chief Economist of AV Birla Group.

The industry is shaking, but not its confidence. A major part is largely dependent on whether Mini Street handles the economy from here on.  And, the next test will be at the RBI policy meeting on April 24.

News Published Under:   Banking and Finance |

Comments