1. Expect US Fed to hike rate by 25 bps, prepared for any eventuality, says RBI Governor Raghuram Rajan

Expect US Fed to hike rate by 25 bps, prepared for any eventuality, says RBI Governor Raghuram Rajan

Reserve Bank of India Governor Raghuram Rajan said there is 70-75 per cent possibility that the rates would be increased by US Federal Reserve.

By: | Kolkata | Updated: December 11, 2015 2:52 PM
rbi raghuram rajan

Reserve Bank of India Governor Raghuram Rajan said on Friday the central bank’s policy was to supply markets with “plentiful” liquidity and said it could “perhaps” do more open market purchases of bonds, depending on long-term liquidity needs. (PTI)

Reserve Bank of India Governor Raghuram Rajan on Friday said the central bank is prepared for any eventuality arising out of Federal Reserve decision and said that he expects upto 25 basis point rise in US interest rates.

“The Fed has prepared the ground and we are expecting that it will raise rates anywhere between one and 25 basis points,” RBI governor Raghuram Rajan said after the central bank’s board meeting on Friday.

There is 70-75 per cent possibility that the rates would be increased, Rajan said.

RBI deputy governor Urjit Patel said it is almost certain that the Fed will raise interest rates next week.

“After analysing the language used by Fed, we are expecting that interest rates will be raised by the US central bank,” Patel said.

He added that one could expect some changes in financial flows in the markets.

“Whatever decision the Fed takes, we are prepared for any eventuality”, Rajan said.

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