Number crunching at RBI

Too much money in the market has forced RBI to curb the demand in form of CRR and repo rate hike. According to RBI report, external inflow of money stood at $18.6 billion between January 2007 and March 23rd 2007 and RBI has already absorbed Rs 23,894 crore between February 1st, 2007 and March 30th, 2007.

A two step CRR hike would take the rate to 6.25 on April 14th and to 6.50 by April 28th. The fixed repo rate has been hiked to 7.75% wth effect from March 30, 2007.

Clearly India looks to be an example of overheating, supply has not been able to keep pace with the demand.