New Delhi, 6 January
The Reserve Bank of India is likely to hold rates in its next policy meet on 28 January, Bank of America Merrill Lynch said in a report today. According to the global brokerage, the July tightening measures have pushed recovery beyond June 2014 and the falling vegetable prices are likely to pull down December CPI inflation to 9.4 per cent.
“We continue to expect RBI Governor Raghuram Rajan to hold rates on 28 January,” Bank of America Merrill Lynch said in a note.
In the mid-quarter review of monetary policy on 18 December, the RBI left key policy rates unchanged, but said it will hike interest rates if inflation does not subside in line with the expected declining trend.
The RBI had kept short-term lending rate unchanged at 7.75 per cent, while the cash reserve ratio (CRR) remained at four per cent.
Since taking over as the RBI chief in September, RBI Governor Raghuram Rajan had increased the key rate by 0.50 per cent in two instalments.
Overseas investment down: Overseas direct investment by Indian companies fell by nearly 37 per cent to $1.58 billion in December 2013 from the same month a year ago, as per the Reserve Bank data released today.
In December 2012, the overseas direct investment by the domestic firms stood at $2.50 billion and in November 2013, it was $2.28 billion.
Maharashtra Seamless, Tata Communications, Bharti Airtel, and Piramal Enterprises were among the major investors to put money in their overseas ventures during the month.
Maharashtra Seamless invested $145 million in its wholly-owned unit in Singapore and Mahindra & Mahindra invested $140 million in its wholly owned entity in Mauritius.
Tata Communications made an investment of $132.85 million in its wholly-owned venture in Singapore, while Shapoorji Pallonli made an investment of $128.95 million in its joint-venture in the UAE.