RBI's Dec policy move could turn real interest rate negative: Economists

Even as market rates have fully reflected the rate cuts, companies are not necessarily in the mood for borrowing, as they face a slump in consumption demand and investment in the country

A rate cut is almost certain in the upcoming monetary policy review on December 5, for a six-year-low growth rate of 4.5 per cent in the September quarter necessitates a larger dose of monetary and fiscal policy measures, a poll by Business Standard of 15 economists and bank treasurers has found.  

The rate cut could be 15 basis points (bps), making the policy repo rate a standard 5 per cent, or it could be 25 bps. But the central bank will face a technical challenge there. Inflation, which has spiked owing to high vegetable prices, is likely to cross 5