RBI to cut repo rates?

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Romit Tembhurne, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur

On 30th march 2015, Business standard states that fall in inflation may lead to fall in interest rates by RBI. Fall in inflation also implies slow growth. As FirstPost mentions it on 1st April, that growth has declined from 1.8 percent in January to 1.4 percent in February in the core sectors. Only coal sector grew by 11.6 percent. This slowdown has put pressure on RBI to cut rates. Economic times posted on 2nd April that the rate cuts are expected on RBI’s policy review, to be held on 7th April. The analysts say that market conditions want RBI to cut rates but analysts see the rate cycle would ease later in May or June. The report by SMC capital says that inflation may not fall down as oil prices gained. Because of these uncertainties RBI is taking its precaution to cut rates. Finally, The Week published on 2nd April that RBI would hold on to the same rate for one or two months.


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