Tuesday, 7 February 2017

RBI seen cutting rates, but it will be a close call

Ripples Advisory Private Limited, Indore @9303093093

India's falling inflation rate gives the Reserve Bank of India (RBI) room to cut its policy rate to a more than six-year low to help an economy hit by a crackdown on cash. The question is whether the RBI will pull the trigger on Wednesday or wait until April. The government presented its annual budget, showed 28 of 46 participants expected the RBI on Wednesday to cut the repo rate by 25 basis points to 6.0 percent, its lowest since November 2010. 

Another two expected a 50 bps cut. That slight bias toward a cut now remained in place after the government delivered a budget that kept its fiscal deficit target for the year starting in April at 3.2 percent of gross domestic product, below the 3.3 to 3.5 percent.

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