RBI policy review on expected lines: Economists
Leading economists today said the RBI decision to keep the key policy rates unchanged was on expected lines and expressed hope that with inflation now treading down it would change its policy stance by next month.
"The policy review was on expected lines but I hope RBI will reduce repo rate by 25 basis points (0.25 per cent) in the January review, and follow it up in the next policies also," Crisil chief economist DK Joshi said.
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The central bank today left the short-term lending (repo) rate and the cash reserve ratio (CRR) unchanged at 8 per cent and 4.25 per cent, respectively. It stated however that with inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onward.
Chief economist of HDFC Bank, Abheek Barua said: "At the current run-rate, headline inflation is likely to considerably undershoot RBI's March 2013 projection of 7.5 per cent, printing in at a lower reading of 7 per cent on the back of moderating core inflation.
"This is likely to prompt RBI to ease its repo rate by 25 bps in the January review and perhaps again by a similar magnitude in March."
Similarly, chief economist of the State Bank of India Brinda Jagirdar said RBI's indication of change in stance towards growth is a step in the right direction.
"The RBI could have reduced the repo and CRR as all the indicators
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