Monetary policy: Here's why RBI may go for rate cut on Thursday

As the Reserve Bank of India’s (RBI’s) Monetary Policy Committee meets on Thursday to take a call on whether to cut or pause rates, Bank of America Merrill Lynch (BofA) has cited several reasons why the central bank might opt for a 25 basis points cut. Interestingly, a Business Standard poll of 10 economists and bond market participants on this question saw mixed results. However, BofA says the RBI will not only cut rates now, but will follow it up with another 75 bps cut in rest of the financial year 2020-21 (FY21).

Here are the reasons for the cut:

6% FY21