India cbank leaves interest rates, CRR unchanged
He said that inflationary pressures persist
Possibility of higher interest rate hike in January - traders, analysts
announced new measures to increase liquidity, yield
(Recast, adds details, comments, background)
By Tony Munroe and Dey Choudhury Suvashree
MUMBAI, 16 December (Reuters) - India's central bank unchanged Thursday, but warned that inflation remains well above its comfort and announced measures against the persistence of liquidity constraints facing the possibility of adding a further rate hike in January.
The Reserve Bank of India has been the most aggressive of the big Asian central banks raising interest rates six times between March and against rising prices by the cost of food in a growing economy struggle caused by almost 9 percent.
Liquidity moves Thursday, combined with the prospect of renewed inflationary pressures, which increases the likelihood that more central bank rate may come next month.
"The military tone of the statement has now convinced us that the temporary repurchase agreements and reverse the next rate hike is likely that the next meeting of the RBI, 25 January," said Robert Prior-Wandesforde, an economist at Credit Suisse in Singapore.
Preliminary Wandesforde planned by the central bank to raise rates by March, and now expects 75 basis points in August.
However, yields and swap rates fell after the RBI announced measures of the statutory liquidity ratio (SLR) to reduce - the minimum level of bank deposits must be kept in government approved securities - 24 percent of 25 percent and issued 10.6 billion U.S. dollars on the purchase of bonds in the next month.
This year, the combined adjustment of the tight liquidity situation had an effect, inflation is still high 7.48 percent in November, but downward trend in the third Asian economy.
"In short, the dynamic growth of the Indian economy remains strong. Although inflation has slowed, it remains well above the comfort of the Reserve Bank" said the producer, in a statement.
Perceived comfort level of the central bank inflation 5.6 percent.
He said that inflationary pressures persist
Possibility of higher interest rate hike in January - traders, analysts
announced new measures to increase liquidity, yield
(Recast, adds details, comments, background)
By Tony Munroe and Dey Choudhury Suvashree
MUMBAI, 16 December (Reuters) - India's central bank unchanged Thursday, but warned that inflation remains well above its comfort and announced measures against the persistence of liquidity constraints facing the possibility of adding a further rate hike in January.
The Reserve Bank of India has been the most aggressive of the big Asian central banks raising interest rates six times between March and against rising prices by the cost of food in a growing economy struggle caused by almost 9 percent.
Liquidity moves Thursday, combined with the prospect of renewed inflationary pressures, which increases the likelihood that more central bank rate may come next month.
"The military tone of the statement has now convinced us that the temporary repurchase agreements and reverse the next rate hike is likely that the next meeting of the RBI, 25 January," said Robert Prior-Wandesforde, an economist at Credit Suisse in Singapore.
Preliminary Wandesforde planned by the central bank to raise rates by March, and now expects 75 basis points in August.
However, yields and swap rates fell after the RBI announced measures of the statutory liquidity ratio (SLR) to reduce - the minimum level of bank deposits must be kept in government approved securities - 24 percent of 25 percent and issued 10.6 billion U.S. dollars on the purchase of bonds in the next month.
This year, the combined adjustment of the tight liquidity situation had an effect, inflation is still high 7.48 percent in November, but downward trend in the third Asian economy.
"In short, the dynamic growth of the Indian economy remains strong. Although inflation has slowed, it remains well above the comfort of the Reserve Bank" said the producer, in a statement.
Perceived comfort level of the central bank inflation 5.6 percent.
