The Hindu Business Line : Bankers forecast RBI may soften policy stance

MUMBAI: With hawkish monetary policy to contain double-digit inflation beginning to bear fruit, the new RBI Governor Mr Duvvuri Subbarao may signal softening of stance in the mid-term review of annual monetary policy next month, bankers said on Tuesday.

“The RBI is likely to end its hawkish policy stance when it meets for the mid-term review. A set of facts such as falling global crude oil prices are likely to take inflation to 7-8 per cent by April,” State-run Jammu & Kashmir Bank Managing Director and CEO, Mr Haseeb A Drabu said here.

Bankers also said that the Governor is likely to take more proactive steps to push the banking sector reforms further.

Even if the RBI did not lower rates, it would certainly not tighten the monetary policy further in the near future.

But the apex bank has a task in hand to bring down inflation to the targeted seven per cent by March next year, the head of a public-sector bank said.

“We can expect the continuity in the Central Bank's actions as the policy tools available with the RBI Governor remains the same. However, given the good signals such as slowing inflation and improving fiscal discipline, the apex bank is likely to mainta in status-quo in the October review,” the official said. - PTI

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