RBI may front-load rate cut to December to support growth: DBS

According to the global financial services major, following the demonetisation move, the dampening impact on economic activity is clear, especially on consumption, supply chain and cash dependent businesses and inflation over this quarter and the next.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney master your money IThe Winning Leap SME Special
Moneycontrol

Home » News » Economy

Nov 29, 2016, 04.00 PM | Source: PTI

RBI may front-load rate cut to December to support growth: DBS

According to the global financial services major, following the demonetisation move, the dampening impact on economic activity is clear, especially on consumption, supply chain and cash dependent businesses and inflation over this quarter and the next.

Like this story, share it with millions of investors on M3

RBI may front-load rate cut to December to support growth: DBS

According to the global financial services major, following the demonetisation move, the dampening impact on economic activity is clear, especially on consumption, supply chain and cash dependent businesses and inflation over this quarter and the next.

Post Your Comments

Share Cancel

| 1 Comments
RBI may front-load rate cut to December to support growth: DBS
While global uncertainties and rupee volatility suggest first quarter of 2017 is a better time to ease rates, the Reserve Bank may bring forward the rate cut to December to support growth and tap favourable inflation outlook, says a DBS report.

According to the global financial services major, following the demonetisation move, the dampening impact on economic activity is clear, especially on consumption, supply chain and cash dependent businesses and inflation over this quarter and the next.

"On policy, while external uncertainties and rupee volatility suggest first quarter of 2017 is a better timeline to ease rates, the central bank might prefer to bring forward the rate cut to December to support growth and tap favourable inflation outlook," DBS said in a research note.

The Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 percent to 6.25 percent. The next RBI policy review is on December 7.

Prime Minister Narendra Modi had announced the demonetisation of Rs 1,000 and Rs 500 notes on November 8, making these notes invalid.

As per the report, attention is likely to be beyond third quarter 2016 GDP growth numbers and instead on managing the fallout of the demonetisation effort.

"Authorities are also focused on the implementation aspects, with withdrawal and usage restrictions tweaked on a regular basis to ease short-term strain," the report said, adding that "overall, progress has and will be gradual and incremental." Deposits are likely to accrue over the next month, but the strain will ease as withdrawal limits are eased and access to other modes become easier, it said.

Demonetisation is expected to affect economic activity, especially consumption, supply chain and cash dependent businesses, as well as inflation over this quarter and the next.

"This assumes that the transition period is complete by the first quarter of 2017," the report added.

Buy, Hold, Sell ? Hear it first on M3
RBI may front-load rate cut to December to support growth: DBS

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login