The Reserve Bank today said it will come out with its third quarter review of the monetary policy for the current fiscal on January 29.
"D Subbarao, Governor, Reserve Bank of India, will release the Third Quarter Review of Monetary Policy 2009-10 on January 29, 2010," the RBI said in a release.
The apex bank's quarterly review is being eagerly awaited as there have been intense speculations that it may signal an interest hike to tighten money supply to contain rising inflation.
Following the global financial meltdown in September 2008, the RBI took a host of measures to make liquidity available to the fund-starved industry.
The RBI reduced the short-term lending (repo) rate by 425 basis points to 4.75 per cent and short-term borrowing (reverse repo) rate by 275 basis points to 3.25 per cent.
The central bank also reduced the cash reverse ratio, the amount of money that banks keep with the RBI, by 400 basis points to 5 per cent.
The Finance Ministry in its Mid-Year Review for 2009-10 has said the Reserve Bank needs to withdraw the easy money policy gradually and in a calibrated manner so as to ensure sustained economic recovery and contain inflationary expectations.
"If inflationary pressure persists for a long time it can fuel inflationary expectations and monetary policy will have to take a nuanced view on this," RBI Governor D Subbarao had also said.
The Prime Minister Economic Advisory Council Chairman, C Rangarajan, recently said the Reserve Bank could reduce money supply and raise interest rate to tame the rising prices of food articles.
The food inflation is over 18 per cent in December and the second quarter growth rate has also touched 7.9 per cent.
Besides, the overall wholesale price has increased phenomenally to 4.78 per cent during November compared to 1.34 per cent in the previous month.
The RBI in its monetary policy review in October has revised the inflation forecast to 6.5 per cent by March-end from 5 per cent earlier.
With the economy showing signs of recovery and inflationary pressure becoming evident, the RBI in its October policy initiated the first phase of exit by raising statutory liquidity ratio (SLR), the portion of funds banks invest in government bonds, by one percentage point to 25 per cent and withdrawing some other steps.
