RBI may hike CRR at its policy review on Oct 30: Lehman

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New Delhi, Oct 17 (UNI) The Reserve Bank of India may raise cash reserve ratio (CRR) to tighten money supply at its half-yearly review of credit policy slated for October 30, the US investment bank Lehman Brothers said today.

''We expect the cash reserve ratio will be raised by 25 basis points in the October 30 policy and by 50 basis points by December,'' Lehman Brothers economist (Asia) Robert Subbaraman told reporters here today.

Since December, RBI has increased CRR, the amount of depositors' money commercial banks need to deposit with the central bank to curb money supply, by 200 basis points to seven per cent to rein in surplus cash from the banking system.

''It may go up by 100 basis points next year,'' Mr Subbaraman added.

The US investment bank Lehman Brothers has said the GDP is expected to stay on a growth trajectory of 10 per cent a year over the next decade.

Lehman expects the economy to grow by 8.8 per cent in 2007-08 and 9.2 per cent in the year after that.

The country has the potential to raise its economic growth rate to 10 per cent or so over the next decade, it said.

India's economy has grown an average of 8.6 percent in the last four fiscal years.

It said many characteristics shown by Asia's third-largest economy were similar to those in other emerging Asian nations during their early stages of economic take-off, such as rising incomes, an increasingly open economy and stable macroeconomic conditions stimulating demand and investments.

UNI

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