RBI Rate Cut

POSSIBLE 25 BASIS POINT RATE CUT BY RBI

The Central Bank had kept the Repo Rates unchanged in the Monetary Policy Committee (MPC) meeting and changed the Reverse Repo Rate by a quarter point.

The current weak growth and softening side of inflation rate might influence the Central Bank to cut policy rates by 25 basis points in August this year as per reports of Bank of America Merrill Lunch (BofA-ML).   Further reasons attributed are:

• The old series gross domestic product (GDP) growth at 4.5-5 per cent is far below the estimated seven per cent trend.
• The core consumer price index based inflation has come down to 4.2 per cent which was 4.8 per cent in October.
• The overall industrial production, credit growth and earning are found to be running much below their medium term averages.

Let us wait and see as to the outcome…..