GET Stock QuotesNews18 APP
News18 English
Powered by cricketnext logo
»
2-min read

Govt Expects Reserve Bank of India to Cut Rate Amid Slowdown

According to a SBI report, the RBI is likely to maintain status quo on key lending rate in its October 4 policy decision as it is "stuck in a conundrum" of low growth, mild inflation and global uncertainties.

PTI

Updated:October 2, 2017, 12:25 PM IST
facebookTwittergoogleskypewhatsapp
Govt Expects Reserve Bank of India to Cut Rate Amid Slowdown
A weaker rupee would raise concerns about market stability and further raise the prospect of a rise in imported inflation. (File photo)
Loading...
Mumbai: New Delhi, Oct 2 (PTI) The government expects a helping hand from the RBI in the form of interest rate cut in the next monetary policy review on Wednesday to boost growth which fell to a three-year low of 5.7 per cent in the June quarter.

Several experts and industry bodies too have made a strong case for lowering of the key interest rate in view of subdued inflation and the urgency to propel economic growth which appears to be reeling under the impact of demonetisation and GST implementation.

However, bankers are of the view that the Reserve Bank of India (RBI) would maintain status quo as inflation has seen witnessed an increase.

According to a SBI report, the RBI is likely to maintain status quo on key lending rate in its October 4 policy decision as it is "stuck in a conundrum" of low growth, mild inflation and global uncertainties.

It said that against the background of flexible inflation targeting, the obvious question that arises is choosing between the move towards the 4 per cent inflation target swiftly or staying in the inflation band.

"We expect the RBI to stay on hold at the upcoming meeting as rising incoming inflation and projections of further acceleration in inflation ahead will mean that there would be limited space for further easing," Morgan Stanley said in the research note.

Last week, a top finance ministry official said there is scope for an RBI rate cut at the next policy review as retail inflation continues to be low.

In its last policy review in August, the RBI reduced the repo rate by 0.25 per cent to 6 per cent in August, citing reduction in inflation risks. The rate cut was the first in 10 months and brought policy rates to a near 7-year low.

However, retail inflation rose to a five-month high of 3.36 per cent in August due to costlier vegetables and fruits.

The consumer price index (CPI) based inflation was 2.36 per cent in July.

The Monetary Policy Committee of the Reserve Bank is scheduled to come out with next bi monthly monetary policy decision on October 4.

India Inc has already made a pitch for rate cut by RBI to perk up economic activity.

Assocham has written to the Reserve Bank of India and the Monetary Policy Committee to cut the interest rates at least by 25 basis points, given the challenges being faced by the economy which needs immediate measures for revival of growth.

"At least 50 basis points elbow room can be taken with regard to 3.2 per cent fiscal deficit for the current year and the next financial year," the chamber said.
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Yes Bank 180.35 3.23
PC Jeweller 83.80 6.68
Reliance 1,112.20 0.47
Infosys 706.05 1.19
HDFC 1,904.10 -1.95
Company Price Change %Gain
Yes Bank 180.35 3.23
PC Jeweller 83.55 6.64
Jet Airways 259.95 3.22
Indiabulls Hsg 792.80 2.40
IOC 141.45 3.10
Top Gainers
Company Price Change %Gain
Bharti Airtel 319.25 5.33
Yes Bank 180.35 3.23
BPCL 345.30 3.11
IOC 141.25 2.80
ONGC 146.85 2.48
Company Price Change %Gain
Bharti Airtel 318.80 5.32
Yes Bank 180.35 3.23
ONGC 146.95 2.58
NTPC 143.65 1.84
Asian Paints 1,340.05 1.51
Top Losers
Company Price Change %Gain
HDFC 1,904.10 -1.95
HCL Tech 961.20 -1.72
JSW Steel 293.10 -1.66
Wipro 333.10 -1.64
Titan Company 931.50 -1.34
Company Price Change %Gain
HDFC 1,904.15 -1.95
Wipro 333.10 -1.67
Larsen 1,411.55 -0.95
Adani Ports 368.95 -0.65
Sun Pharma 419.75 -0.57

Live TV

Loading...
Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results