RBI to roll back rupee steps in Q4: Barclays

Downgrades India's GDP growth forecast to 5.3% for 2013-14 fiscal

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Barclays expects the RBI's cash tightening steps to be rolled back only in the December quarter as the Reserve Bank of India wants to avoid showing a lack of resolve about its measures by reversing them too soon.

"Having adopted these measures, the RBI will likely find it difficult to quickly reverse them, as that could be seen as a lack of resolve on the part of the central bank to support the currency and could be an additional risk for the INR."

Barclays also downgraded India's GDP growth forecast to 5.3% for 2013/14 fiscal year from 6%.

The bank also pushed back their 75 basis point rate cut expectations to December 2013-April 2014 from September-December 2013 following the central bank's cash tightening steps.