Money & Banking

Maintaining a calibrated approach

Renu Sud Karnad | Updated on March 18, 2011

BL18RENUSUD

By increasing the repo and reverse repo rates by 25 basis points each, the central bank is maintaining its calibrated approach. These measures are also in line with market expectations. I don't see any immediate hike in interest rates. The demand for housing depends on the overall cost of buying a house, and till such time buying a house is affordable there will be demand from buyers.

With inflation at 8.31 per cent for February and in view of rising fuel prices, following the uncertainties in West Asia, and high food prices in the domestic market, the RBI has revised its March-end inflation forecast to 8 per cent from 7 per cent projected earlier.

According to the RBI, these initiatives are expected to control demand-side inflationary pressures.

(The author is Managing Director, HDFC Ltd.)

Published on March 18, 2011

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