Business Standard

RBI may cut rates on Dec 18 review: Barclays

The RBI is scheduled to announce its mid-quarter monetary policy review on December 18

Related News

The Reserve Bank is unlikely to cut the repo rate before the end of January, British brokerage Capital said today.

"Repo rate cuts, which should lead to an actual easing of call money rates, are not expected before late January," it said in a report released here.

The is scheduled to announce its mid-quarter monetary policy review on December 18.

Reserve Bank Governor D Subbarao has resisted wide calls for the growth-propping rate cuts for some time now, citing the elevated inflation.

The report was compiled ahead of today's government data which showed a dip in GDP growth to 5.3% for the second quarter of the current fiscal.

"The entrenching growth slowdown is likely to trigger repo rate cuts next quarter," Barclays said, adding that the market has already factored-in the cuts.

Given the tight liquidity condition, which have seen banks borrowing up to Rs 1 trillion from the overnight window in the recent weeks, Barclays said RBI will continue cutting the cash reserve ratio and undertake Government bond buybacks.

"Liquidity infusions (CRR, OMOs) will likely have to be continued in the next three months merely to contain the liquidity deficit," it said.

The RBI had cut the CRR by 1.75% through 2012, the last one being in the quarterly monetary policy announcement in October.

Read more on:   
|
|

RBI may cut rates on Dec 18 review: Barclays

The RBI is scheduled to announce its mid-quarter monetary policy review on December 18

The Reserve Bank is unlikely to cut the repo rate before the end of January, British brokerage Barclays Capital said today.

The Reserve Bank is unlikely to cut the repo rate before the end of January, British brokerage Capital said today.

"Repo rate cuts, which should lead to an actual easing of call money rates, are not expected before late January," it said in a report released here.

The is scheduled to announce its mid-quarter monetary policy review on December 18.

Reserve Bank Governor D Subbarao has resisted wide calls for the growth-propping rate cuts for some time now, citing the elevated inflation.

The report was compiled ahead of today's government data which showed a dip in GDP growth to 5.3% for the second quarter of the current fiscal.

"The entrenching growth slowdown is likely to trigger repo rate cuts next quarter," Barclays said, adding that the market has already factored-in the cuts.

Given the tight liquidity condition, which have seen banks borrowing up to Rs 1 trillion from the overnight window in the recent weeks, Barclays said RBI will continue cutting the cash reserve ratio and undertake Government bond buybacks.

"Liquidity infusions (CRR, OMOs) will likely have to be continued in the next three months merely to contain the liquidity deficit," it said.

The RBI had cut the CRR by 1.75% through 2012, the last one being in the quarterly monetary policy announcement in October.

image

Read More

Festive season brings cheer for banks in retail credit

The reduction in interest rates by banks in home loans has finally helped banks to garner a higher month-on-month growth this year in the festive ...

Recommended for you

Advertisements

Quick Links

More news from Finance Rss icon

Banks left out as 'Kunal calls Kunal' for e-commerce M&As

The way Snapdeal bypassed investment banks for the Freecharge deal might give the bulge bracket banks sleepless nights

Insurers, banks oppose mandatory cap on business from one insurer

Irdai has said no corporate agent can get more than 90% business from one insurer in life, non-life or health in their first year of operation

M Nagaraja Sarma to head Health Insurance TPA of India

TPA to begin operations from 1 July, 2015

Back to Top