With no changes to CRR and SLR, the RBI committed a dry 25 bp to its 500 bp hikes from February 2010, enumerating inflation expectations / liquidity as its key policy targets. The move is mild following market expectations of continuing rate hikes on the overnight rate.

The Savings rate has been deregulated opening chances that depositors will make upto 6% on average daily balances in the regime. 90 day Deposits are pegged around 6.25% currently 

As for us we have also already indicated that this cannot be the last hike as this RBI expects inflation to come down by Christmas or before that and that looks a trifle unlikely

Fixed Income yields continue trending to 9% still keeping open, the possibility of this isolated economy reverting to a high systemic measur eand higher double digit rates as in the nineties. - following commentary on Udayan's 1) 

 

 

 

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