Monetary Policy: RBI may cut rates, turn 'accommodative' after dismal GDP

The RBI had retained its 'neutral' stance after the rate cut in April but traders said a change in this stance to 'accommodative' will be more comforting for markets

A worrying slowdown in India’s economy makes a cut in the Reserve Bank of India’s benchmark interest rate highly likely this week, but analysts say policymakers should also find ways to boost banks’ liquidity to ensure they drop their lending rates too.

Beginning a three day review on Tuesday, the RBI’s six-member monetary policy committee (MPC) can draw comfort from subdued inflation. Running at 2.92 % annually in April, it has stayed below the medium term target of 4% for the past nine months.

Two-thirds of 66 economists polled by Reuters expect the MPC to wrap up on Thursday by cutting the