The Hindu Business Line : ICICI Sec sees repo rate hike

ICICI Securities expects the Reserve Bank of India to hike the repo rate by 25 basis points in its April policy to reinforce its objective of containing inflation expectations. This would also show that the central bank has retained its tightening bias, according to the latest debt market update of ICICI Securities. The firm also said that it does not expect the RBI to hike the cash reserve ratio (CRR), adding that there is a low probability of the bank cutting the statutory liquidity ratio. It, however, expects the RBI to hike the CRR by 50 basis points in May or June. "As such, there is strong case to cut SLR by 100 basis points. Should the Central Bank decide to cut SLR in the policy, we expect it to simultaneously hike CRR by 50 basis points in order to signal to banks that RBI is keen on moderating credit growth", says the debt markets update.

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