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Our Bureau

Thiruvananthapuram, Oct. 12 Liquidity drought is what continues to drive active Reserve Bank intervention as was made clear on Friday when the regulator went in for another round of CRR cut, according to Crisil. Dr D.K. Joshi, Director and Principal Economist at the rating agency, told Business Line that inflationary pressures are still running high thanks mainly to currency depreciation. These conditions will stay as such for another two months at least.

This is despite the fact the supply and demand pressures have eased in recent times. In this context, any downward revision of the interest rates would not become possible until early next year. However, Crisil had not thought of revising the GDP growth rates for the current fiscal, Dr Joshi added.

Mr Ananda Bhoumik, Senior Director, Fitch Ratings, too was of the view that double-digit inflation would prevail over the next two-month period at least. Credit growth has continued to flare up at around 25 per cent and, given this, the inflation numbers may have been bothering the RBI top brass no end.

More Stories on : CRR & Bank Rates | RBI & Other Central Banks | Credit Market

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