Goldman Sachs expects RBI to cut rates by 25 bps
MUMBAI (Reuters) - Goldman Sachs expects the Reserve Bank of India (RBI) to cut its key interest rate by 25 basis points at its policy review on Tuesday after last week's inflation data came well below expectations, and as economic growth remains sluggish.
The investment bank expects another 25 basis point cut in the repo rate in January, according to an email sent to clients on Monday. Goldman had previously forecast the RBI would cut interest rates by 50 basis points in March.
"With both growth and inflation surprising on the downside relative to the RBI's forecast, there is a reason for the central bank to move earlier than its previous guidance," economist Tushar Poddar wrote in the note.
Data on Friday showed the wholesale price index rose 7.24 percent from a year earlier in November, below expectations for a rise of 7.6 percent. Core inflation was 4.5 percent.
The country's economy grew 5.3 percent from a year earlier in the July-September period.
A majority of analysts polled by Reuters expects the RBI to keep the repo rate on hold, with respondents split about whether it will cut the cash reserve ratio for banks.
(Reporting by Shamik Paul; Editing by G.Ram Mohan)
- Tweet this
- Share this
- Digg this
- UPDATE 2-Malaysia Airlines plane returns safely after landing gear scare
- On Easter, Pope calls for end to war, condemns waste exacerbating hunger
- Abdullah widens lead in Afghan presidential vote - latest count
- Australia sees "regroup" on Malaysian plane search in a few days
- Bangalore-bound Malaysia Airlines plane to make emergency landing
Nitin Gadkari, former president of the Bharatiya Janata Party and a member of the BJP’s manifesto committee, speaks to Reuters. Here are the edited excerpts. Full Article