RBI unlikely to cut rates on April 17
11.4.2012 (UNI) A week before Reserve Bank of India (RBI) Governor D Subbarao announced the RBI policy for fiscal 2013, analyst firm Morgan Stanley today indicated that the Central Bank might delay policy rate cuts.
In a report here, it said some market participants are beginning to build hopes for a policy rate cut on April 17. However, it will be a difficult decision to cut rates.
It, however, said during the current year (calendar 2012), RBI is likely to cut the policy rates by 0.75 per cent.
Visualising a 25 per cent low probability in any policy cut during the April 17 policy pronouncement, it felt that at least three macro factors warrant a delay in policy rate cut. It said the current account deficit has been widening above 3.5 per cent of GDP, implying no room for any further boost to aggregate demand. UNI