RBI may not ease rates till Jan 2015: Icra
The Reserve Bank is unlikely to ease rates till early 2015 as the possibility of a below-average monsoon will make it difficult to contain inflation at the targeted 8 per cent by next January, rating agency Icra said.
It, however, said that in spite of this, there will be a pick-up in GDP growth to up to 5.5 per cent in the current fiscal.
"The expectation of below-average rainfall in conjunction with the structural factors that exert stickiness on food and non-food CPI inflation would make it challenging for the RBI to contain CPI inflation below 8 per cent by next January," the rating agency said today.
Therefore, "the most likely scenario" is an extended pause for policy rates and monetary easing will be delayed until, at least, early 2015, the agency added.
"GDP growth will improve somewhat to 5-5.5 per cent in FY15, factoring in a mild improvement in manufacturing growth and a pick-up in investments from the second half of the fiscal," it said.
It can be noted that according to official estimates, GDP growth in FY14 is expected to come in at 4.9 per cent, up from 4.5 per cent in FY13, Icra said.
It said RBI’s target of getting consumer price inflation at 8 per cent by January 2015 may not be met, and cited the Met department’s forecast of a below trend rainfall this year as the reason for this.
High interest rates will dampen economic revival and high interest rates will also limit any uptick in consumption demand, it said.
The agency said other factors like resolution of sector- specific issues - fuel linkages for power, high leverage levels and tight liquidity of the developers, asset quality concerns at banks - are preconditions for a revival in investment climate.
It added emergence of "a stable political outcome" from the ongoing general elections is also crucial.
Assuming a GDP growth in 5-5.5 per cent range, the agency expects a 12.75-13.50 per cent rise in bank deposits and 13.5-14.5 per cent growth in credit.
Demand from corporates will only grow after a revival in economic growth, once the financial health of the corporate sector improves, it added.
Icra said with domestic rates higher due to inflation and a tight monetary policy, it works favourably for the high yields chasing foreign institutional investors to invest in the country.
This will also result in the external commercial borrowing route to continue being attractive for corporates due to the interest rate differential.
Please note that under 66A of the IT Act, sending offensive or menacing messages through electronic communication service and sending false messages to cheat, mislead or deceive people or to cause annoyance to them is punishable. It is obligatory on kemmannu.com to provide the IP address and other details of senders of such comments, to the authority concerned upon request. Hence, sending offensive comments using kemmannu.com will be purely at your own risk, and in no way will Kemmannu.com be held responsible.
Similarly, Kemmannu.com reserves the right to edit / block / delete the messages without notice any content received from readers.
Obituary: Juliana Quadros (80), Kodi, Kemmannu
Final Journey of Emilian Bridget D’Souza (80 years) | LIVE from Kemmannu | Udupi |
2 BHK Flat for sale on the 6th floor of Eden Heritage, Santhekatte, Kallianpur, Udupi
Agricultural Land at Alevoor and Malpe (UDUPI) for Sale - Contact Direct to 9008199430.
Final Journey of Judith Lewis (91 years) | LIVE From Kallianpur
Rozaricho Gaanch April, 2024 - Ester issue
Final Journey Of Theresa D’Souza (79 years) | LIVE From Kemmannu | Udupi |
Invest Smart and Earn Big!
Creating a World of Peaceful Stay!
For the Future Perfect Life that you Deserve! Contact : Rohan Corporation, Mangalore.
Final Journey Of Joe Victor Lewis (46 years) | LIVE From Kemmannu | Organ Donor | Udupi |
Milagres Cathedral, Kallianpur, Udupi - Parish Bulletin - Feb 2024 Issue
Way Of Cross on Good Friday 2024 | Live From | St. Theresa’s Church, Kemmannu, Udupi | LIVE
Good Friday 2024 | St. Theresa’s Church, Kemmannu | LIVE | Udupi
Maundy Thursday 2024 | LIVE From St. Theresa’s Church, Kemmannu | Udupi |
Kemmennu for sale 1 BHK 628 sqft, Air Conditioned flat
Symphony98 Releases Soul-Stirring Rendition of Lenten Hymn "Khursa Thain"
Palm Sunday 2024 at St. Theresa’s Church, Kemmannu | LIVE
Final Journey of Patrick Oliveira (83 years) || LIVE From Kemmannu
Carmel School Science Exhibition Day || Kmmannu Channel
Final Journey of Prakash Crasta | LIVE From Kemmannu || Kemmannu Channel
ಪ್ರಗತಿ ಮಹಿಳಾ ಮಹಾ ಸಂಘ | ಸ್ತ್ರೀಯಾಂಚ್ಯಾ ದಿಸಾಚೊ ಸಂಭ್ರಮ್ 2024 || ಸಾಸ್ತಾನ್ ಘಟಕ್
Valentine’s Day Special❤️||Multi-lingual Covers || Symphony98 From Kemmannu
Rozaricho Gaanch December 2023 issue, Mount Rosary Church Santhekatte Kallianpur, Udupi
An Ernest Appeal From Milagres Cathedral, Kallianpur, Diocese of Udupi
Diocese of Udupi - Uzvd Decennial Special Issue
Final Journey Of Canute Pinto (52 years) | LIVE From Mount Rosary Church | Kallianpura | Udupi
Earth Angels Anniversary | Comedy Show 2024 | Live From St. Theresa’s Church | Kemmannu | Udupi
Kemmannu Cricket Match 2024 | LIVE from Kemmannu
Naturya - Taste of Namma Udupi - Order NOW
New Management takes over Bannur Mutton, Santhekatte, Kallianpur. Visit us and feel the difference.
Focus Studio, Near Hotel Kidiyoor, Udupi
Earth Angels - Kemmannu Since 2023
Kemmannu Channel - Ktv Live Stream - To Book - Contact Here
Click here for Kemmannu Knn Facebook Link