The Reserve Bank of India, which has started exiting its easy money regime, might hike its Cash Reserve Ratio and policy rates over the next 4-5 months, research firm Macquarie said on Monday.

While the central bank may hike the CRR by 0.5 per cent as early as next month, it may start upping the policy rates (repo, reverse repo) by 1-1.5 per cent by April, Macquarie Securities, India & ASEAN Economics Head, Rajeev Malik told reporters here.

“The hike in CRR is likely to happen in January by 50 basis points. For the entire FY11, we expect the policy rates to go up by upto 1.5 per cent,” Mr. Malik said.

CRR is the percentage of amount banks are required to park with the central bank. Repo and reverse repo rates (policy rates) are the rates at which RBI lends and borrows from banks.

As part of the policy exit, RBI restored the Statutory Liquidity Ratio (SLR) in October to 25 per cent, besides tightening the provisioning norms for banks.

“These are sensible moves and should be seen in the context of the emergency cuts that were announced late last year but are not needed now,” Mr. Malik said.

On the exit, the apex bank will be facing key challenges like a fragile economic recovery, weak loan growth and rising inflation, the research firm said.

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