Reserve Bank of India is expected to cut policy rates next Tuesday, according to a poll, after the weakest economic growth in a decade, slowing inflation and a commitment by the government to contain its fiscal deficit. <\/p>\nReserve Bank of India is expected to cut policy rates next Tuesday, according to a poll, after the weakest economic growth in a decade, slowing inflation and a commitment by the government to contain its fiscal deficit. <\/p>\n
Of 40 analysts polled, 32 expect the Reserve Bank of India to cut the policy repo rate by 25 basis points to 7.50 per cent, a view in line with a poll conducted in January. <\/p>\n
The latest survey was conducted before Tuesday\u2019s data that showed industrial production expanded in January for the first time in three months while retail inflation picked up slightly in February. <\/p>\n
However, the wholesale price index for February, which is the key measure of inflation, is due out on Thursday and the consensus forecast is that prices rose at their slowest rate in more than three years. <\/p>\n
Such a moderation may give the central bank the breathing space to consider a rate cut.
\n\u201cContinued downside surprise in growth, along with relatively benign inflation prints and sharp tightening in government spending, should allow the Reserve Bank of India to deliver one more \u2018calibrated\u2019 dose of easing,\u201d said Siddhartha Sanyal, India economist at Barclays Capital. <\/p>\n
\u201cThe elevated current account (deficit) remains a concern. But the growth-inflation dynamics should be overpowering at the moment,\u201d Sanyal said. <\/p>\n
The Reserve Bank of India cut the repo rate by 25 basis points to 7.75 per cent in January after leaving rates on hold for nine months. <\/p>\n
The bank said at the time that sticky inflation as well as high current account and fiscal deficits remained constraints for big cuts. <\/p>\n
Economy grew at 4.5 per cent in the December quarter and is on track for its slowest performance in a decade at around 5 per cent for the fiscal year that ends in March. <\/p>\n
The median estimate of 36 respondents in the poll is for the Reserve Bank of India to further reduce the repo rate by 25 basis points by June. <\/p>\n
The new poll also showed rate cut expectations further in the year are appearing less certain, with half of respondents now expecting the repo rate to fall to 7.00 per cent by the end of December. <\/p>\n
In the last poll, 15 of 29 respondents expected the repo rate to fall to 7.00 per cent by the end of September. <\/p>\n
Reserve Bank of India Governor Duvvuri Subbarao struck a hawkish note last week, rejecting views of high inflation as a \u201cnew normal\u201d for India and said many of the supply driven causes can be corrected. <\/p>\n
Most respondents expect the central bank to keep the cash reserve ratio (CRR) for banks unchanged at 4 per cent. <\/p>\n
cash reserve ratio is at its lowest since 1976. Of the 37 respondents, 31 do not expect a cash reserve ratio cut on Tuesday.<\/p>\n","protected":false},"excerpt":{"rendered":"
Reserve Bank of India is expected to cut policy rates next Tuesday, according to a poll, after the weakest economic growth in a decade, slowing inflation and a commitment by the government to contain its fiscal deficit. Of 40 analysts polled, 32 expect the Reserve Bank of India to cut the policy repo rate by […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-84928","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/84928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=84928"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/84928\/revisions"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=84928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=84928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=84928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}