NDTV Profit

RBI expected to cut repo rate by 0.25 per cent: NDTV Profit poll

D. Subbarao's equanimity is noteworthy. The Reserve Bank of India Governor has steadfastly fended off criticism from the government and outside it for leaving key interest rates unchanged after every policy review in the past nine months. No mean feat for the central banker of an economy that is set to post its slowest growth in a decade.
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RBI expected to cut repo rate by 0.25 per cent: NDTV Profit poll
New Delhi:

D Subbarao's equanimity is noteworthy. The Reserve Bank of India governor has steadfastly fended off criticism - from the government and outside it - for leaving key interest rates unchanged after every policy review in the past nine months. No mean feat for the central banker of an economy that is set to post its slowest growth in a decade.

However, the review meet today (January 29) may be an entirely different ballgame. In an NDTV Profit poll of 18 banks, 80 per cent of the bankers expect the central bank to cut its key repo rate - the rate at which RBI lends to commercial banks - by 25 basis points (or 0.25 per cent), from the current 8 per cent, while 15 per cent of the bankers expect a steeper 50 bps cut.

India is the only BRIC country in which lending rates are stuck at their 2008 peak, according to a Bank of America Merrill Lynch report. If the central bank does cut the repo rate, commercial banks may pass on the benefits to customers, reducing their interest rates on loans.

Despite constant calls for an interest rate cut from the industry to boost production, which contracted by 0.1 per cent in November, the central bank has time and again stated that controlling inflation remains its key objective.

With inputs from agencies

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