IIP, CPI data raise expectations of a rate cut by RBI

Market regulator expected to cut rate by 25 basis points in its October review meeting

Recent data pointing to a slowing in industrial production growth and to a fall in retail price inflation has given room to the Reserve Bank of India (RBI) to cut its policy rate at the review meeting on August 2, believe many economists and bankers.

 

Not all share the belief. And, even those who think RBI will cut the rate add that the lower borrowing cost will not be able to revive investment or credit growth (which fell to a 40-year low of 5.1 per cent in 2016-17) in a hurry.

The Index of Industrial Production (IIP) expanded 1.7 per cent in