State Bank of India Chairman O P Bhatt today hinted that the Reserve Bank may go in for a 0.25 per cent hike in its key rates during the quarterly monetary policy review tomorrow.
"The RBI may raise rates by at least a minimum of 0.25 per cent," Bhatt told reporters today.
However, he was quick to add a caveat, saying, "the decision which the RBI has to take is not easy. Both possibilities are there...It can go for a status quo or raise the rates by at least a minimum of 0.25 per cent," he said.
"If you look at the context of inflation versus growth, of late there has been some tightening going on and the tightening in the market is fairly evident but inflation has not come down to comfortable levels. So it's a toss now," he said.
A majority of economists and sector experts are of the view that faced with high inflation and the task of taming it, the RBI will hike its key rates by 0.25 per cent, which would make it a sixth straight hike this year.
Currently the repo rate--the rate at which the RBI lends to the bank stands at six per cent and the reverse repo at which it borrows from banks is at five per cent.