Hi real,
Yes the news channels were also full of analyst chatter along the same lines.
Analysts - They are like meteorology dept - when it rains, they predict more rain. Analysts did not anticipate 0.5% RRR raise. Now they are predicting lots of rate rise.
I believe RBI is more sensible than these analysts. They were prudent in 2006 when they predicted RE bubble. They were aggressive in raising rates, but lowered rates aggressively when the rest of the world followed suit.
If I was running the RBI, I would raise CRR and not the repo. It would be more effective in beating enflation. In fact I was expecting 0.25% RRR increase and a CRR increase this time around.
Maybe some specific things - some bond auctions etc - are anticipated by RBI and that is why they left CRR untouched.
RBI can also increase the risk in commercial RE - which is probably substantial, and ask for more provisioning by banks - which will cool RE prices and also bring down bank stocks.
I would lighten up on banks and RE stocks for now.
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Venky
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