A 100 basis point hike in the Statutory Liquidity Ratio (SLR) by RBI cannot be ruled out at its policy meet next week, DBS said in a note on Friday.SLR, now at 24 per cent, is the minimum share of bank deposits to be held in approved government securities.
DBS said the hike in SLR would reverse the 100 basis points cut implemented in November 2008. The SLR was held steady for 11 years before last year’s cut. DBS also said it expects the first rate hike to come in January 2010.
“Our current forecast is for 200 basis points of hikes in 2010 though another 50-150 basis points of hikes would not come as a big surprise,” said Ramya Suryanarayanan, economist at DBS in Singapore.At its policy review on Oct. 27, the Reserve Bank of India (RBI), is expected to keep the benchmark lending and borrowing rates on hold, a Reuters poll showed on Friday.
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