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 Barclays 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 RBI 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

Quick Links

More news from Finance Rss icon

SBI to divest 10% in life insurance venture

Last week, SBI said it would be reducing stake in its general insurance venture from 76 per cent to 51 per cent

Net claims from non-residents on India dip in Q3

The RBI stated Indian residents' financial assets abroad stood at $490.5 billion at end-December 2014

RBI liberalises norms for taking position in exchange-traded currency derivatives

The Reserve Bank of India (RBI) has liberalised the norms for taking position in exchange-traded currency derivatives.It raised the ceiling on ...

Back to Top