RBI to maintain status quo on monetary policy: Dun & Bradstreet India

RBI to maintain status quo on monetary policy: D&B India
The Reserve Bank of India (RBI) is likely to maintain status quo in its upcoming monetary policy review, Dun & Bradstreet India said in a report.

"The pass through of the sharp depreciation of rupee witnessed over the past few months is now being witnessed as inflation in non-food articles and petrol inches higher. This along with the price pressures from food articles, especially vegetables and fruits, pose challenges to the monetary policy action," said the research report.

"Non-abating of inflationary pressures is likely to keep interest rates high as the RBI is likely to hold policy rate at elevated level," Singh said.

"While the RBI is trying to bring down the short term interest rates, interest rates in general are likely to remain elevated during the year dampening both consumption as well as investment demand," the report added.

The report said the country's factory output which grew at mere 0.6 per cent in August, is likely to hover in the range of 1.5-2.5 per cent in Sept-13. "Recovery of IIP seems to be tenuous in the near term as the moderation in demand is likely to weigh down heavily on industrial production which is already affected by the supply side issues," the report said.

Dion Global Solutions Ltd.

Story first published: Thursday, October 17, 2013, 9:12 [IST]
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