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Indian central bank may cut key rates

Mumbai, April 15, 2012

The Reserve Bank of India (RBI) is likely to cut its repo rate for the first time in three years in an attempt to lift sagging economic growth, even as high oil and food prices remain a challenge to managing inflation, a poll showed.

Out of the 20 analysts polled, 17 expect the RBI to cut the repo rate by 25 basis points to 8.25 per cent on Tuesday, while three see it unchanged.

The RBI has held its key interest rate steady since its policy review in mid-December, after raising it 13 times from March 2010 to tame high inflation, most recently in October. Its last rate cut was in April 2009.

Of 19 respondents, 13 expect no cut next week in the cash reserve ratio (CRR) requirement for banks, or the share of deposits lenders have to maintain with the RBI.

Only four respondents forecast a 50 basis points cut in CRR on Tuesday, while two see a 25 basis point cut.




Tags: Reserve Bank of India | Interest rates |

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