Chetan Ahya, Managing Director, Morgan Stanley, does not expect rate hikes before February-March 2010. “We do not see rate hikes in the near term. However, the RBI could hike interest rates by February-March 2010.”
However, he did not rule out the possibility of the RBI changing its cash reserve ratio (CRR) or the market stabilisation scheme (MSS) before changing policy rates. “A potential hike in CRR is possible by the last quarter this year.” He believes, lending rates can fall by 25-50 basis points.
He expects industrial production to reach 7-8% by March 2010. “Industrial growth can offset a slowdown in agriculture.”
Morgan Stanley, he said, maintains a GDP forecast of 6.2% for FY10. ”However, he sees an upside risk to the forecast.”
According to him, the traction from monetary and fiscal policy was better than expected.
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