Click to play videoNew Delhi: The annual credit policy is to be announced on Tuesday and the most important concern is if the Reserve Bank of India will make loans dearer.
The six weeks since March 1 - when inflation climbed up from 5 per cent to 7.4 per cent - triggered much fury in Parliament and brought an unexpected, out-of-schedule Cash Reserve Ratio (CRR) hike from RBI Governor Y V Reddy.
Are the inflation figures unacceptable enough for Reddy to signal more tightness on Tuesday, or will he want to pause when to estimate the impact of the actions taken so far?
The market is somewhat divided. In a poll conducted by Network 18, more than half of industry experts say the RBI will hike the repo rate and thus signal higher interest rates.
68 per cent of money market participants polled feel he will hike the repo rate in this policy, thus asking banks to raise rates.
Another 20 per cent polled feel he will hike the reverse repo rate as well thus giving a strong message against inflation
The other category of 32 per cent say the wholesale price index, which was rising by 12-18 ticks in March, rose by just three ticks in the second week of April.
That will be reason enough for Reddy to pause. A minority who doesn't believe the governor won't change any rates, however hold that the pause, if at all will be temporary.
They expect an extremely hawkish stance that will indicate the RBI will move any time, almost certainly before the next policy, thus keeping up the pressure on the market.
Anything less will be seen as a sign that he intends to tighten rates further.
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