InvestorQ : Is the RBI likely to raise rates in the December 2021 policy?
Katherine Gonsalves made post

Is the RBI likely to raise rates in the December 2021 policy?

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rhea Babu answered.
3 weeks ago
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You have to really wait and see, but let us look an interesting view provided by Credit Lyonnais on this subject. According to CLSA, the RBI would most likely sustain low interest rates for some more time in order to boost demand in the Indian economy. The argument given by CLSA is that even if the RBI chooses to tighten, the lending rates were so low that these rates would take some more time to react.

For the FY22, CLSA estimates that RBI would focus largely on retaining the accommodative stance although it would continue to soak out any surplus liquidity in the financial system. CLSA has also opined that the reduction in the excise duty and VAT on petrol and diesel, combined with a good Kharif output, should temper inflation. However, CLSA does estimate an aggressive 100 bps rate hike happening in the next fiscal year FY23.
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