RBI rate hike 25 bps

Inability of the Govt to offset the mounting inflationary pressure led RBI for another rate hike of 25 bps, it is the 8th hike in the past one year and great concern for the Govt, banks, economy and moreover the general masses. With the constant rise in food products, consumables inflation has gone haywire and its worst effect is felt at every nook and corner especially the poor, lower middle class and middle class people are the victims of inflation, corruption. Banks have started thinking about passing on the rate hike to the consumers, both corporate as well as retail consumers. Interest rates on car, home etc will rise as banks pass on the burden to consumers.

There is risk of economic expansion as the FDI flow may squeeze to a remarkable extent as well as the the soaring prices of oil and commodity may offset the Govt's anti-inflationary policy. Stock market is likely to see a decline in the near future with Nifty may see a level of 5200-5100 by march expiry. These grave economic issues have been disturbing the present Govt and it does not seem to be an easy task for the govt to find out some instant solution, and above all govt's dream 9% growth projection seems to be fading away. There is a crisis going on in west Asia and North Africa and as a result of which the whole world is going through some sort of a economic slow down and the recent disruptive tsunami in japan is like heavy blow to the countries that are connected to japan through trade and service. Crude oil prices almost reached $120/barrel giving further concern to the economy. It is a clear depression in the Indian economy as you can see the wholesale index has gone up to 8% in the month of march while it was just at 1.5% year back. It seems a real bad news for the economy.

Written By Dipti Prasad Padhi

By : | Category : Business and Economy| Date : November 07,2011

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