RBI likely to cut repo rate by 25 bps: CNBC-TV18 Poll

Indian retail inflation has eased to a four-month low of 4.87 percent and industrial output is slowing to a 2.1 percent. In this scenario, bankers, bond dealers and economists believe a rate cut from the Reserve Bank of India (RBI) may be just what the doctor ordered.

Seventy percent of economists and financial experts polled by CNBC-TV18 expect Governor Rajan to cut repo rates by 25 bps on June 2. This confidence is bolstered by the fact that he passed on cutting rates in the April policy.

However, not a single person believes that a 50 bps rate cut could be in the offing. Expectations are also pretty uniform when it comes to RBI action on other policy parameters.

Ninety-five percent experts do not expect any change in the cash reserve ratio (CRR) while just 15 percent expect Rajan to cut statutory lending ratio (SLR) by 25 bps to 21.25 percent.

Rate cuts for rest of 2015

Sixty percent respondents say the Governor will cut rates by 50 bps while 35 percent say 25 bps and a remaining 5 percent say 75 bps.