soon, analysts said Wednesday.
"The possibility of another rate hike this fiscal
appears to be low," ratings agency Crisil said after the
release of the fifth bi-monthly policy, in which the rate
setting panel kept the repo rate unchanged at 6.50 per cent.
The agency said maintaining the "calibrated
tightening" stance will not have any impact.
Its smaller rivals India Ratings and Icra also
concurred, saying a rate hike is unlikely in the near term.
"So long RBI does not get convinced about the
sustainability and continuance of the low inflation rate
witnessed currently, it is unlikely to change its policy
stance from calibrated tightening to neutral," India Ratings
said in a note.
It said RBI's concerns on inflation emanate from
sudden spike in the price of perishables, risk from revision
in minimum support prices (MSPs), which has yet not played out
fully, crude oil prices, global financial market volatility,
fiscal slippages and staggered impact of HRA revision by state
Icra said the proposal to link banks' lending rates on
new retail and MSME loans with external benchmarks is expected
to improve the transparency in loan pricing by banks as the
existing benchmarks, especially the base rate, have not led to
a full transmission of the benefits of decline in cost of
funds for banks' to borrowers.
It added profitability of banks may see a higher
volatility, unless they are able to raise floating rate
deposits linked to external benchmarks.
On the cut in statutory liquidity ratio, it said the
action will have a relatively more positive for private sector
banks as their SLR holdings are closer to regulatory
requirements, as against public sector banks.
"Notwithstanding the already high credit-deposit
ratio, the proposed cut raises the ability of private banks to
deploy their deposits in higher yielding loan assets. Public
sector banks on the other hand will need to shore up their
capital position to pursue credit growth and benefit from the
lower SLR requirements," it said.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)