Inflation

At present the inflation in primary articles, especially food index, is a big concern. The food inflation has touched double digits.

However analysts say that tightening of monetary policy will have little effect on food inflation since it is driven by supply side factors.

The discussions related to this indicate that there are little chances of hikes in rates.

Credit off-take in home loan segment

Amidst the global crisis, credit off-take for banks had been low during last few quarters but thanks to festive schemes launched by various banks, consumers' sentiments have improved.

The home loan rates are likely to remain stable for quite some time, as leading banks have extended their festive schemes to lure more borrowers to increase credit offtake.

External factors

Due to globalization and strong interdependence of the economies, central banks have to take into account various global factors before taking any policy decisions within the country.

As far as the present global scenario is concerned, there is still uncertainty. Huge stimulus packages announced by central banks have led to increase in inflation rate in many countries.

However, the inflation rate in the US is still low and the Federal Reserve has said that it will maintain soft interest rates for an extended period.

Considering the overall global situation, policymakers are being cautious about changes in the monetary policy. Therefore, the interest rates are expected to be stable in the near term.