The central bank may cut rate by 25 bps today and another 25 bps by the end of this year to save the economy from running into recession, says Hartmut Issel of UBS.
With only a few days to go for RBI's credit policy meet, it is anybody's guess as to what would be the rate cut. But bankers and bond dealers are sure of one thing: banks should have more liquidity.
In a surprise move, the Reserve Bank of India (RBI) today cut the benchmark repo rate by 25 basis points to 7.5 percent. Analysts said the out-of-cycle interest-rate cut confirms the central bank has definitively embarked on its much-awaited easing cycle.
Angel Broking has come out with its review on RBI' monetary poilcy. "Expectations of CPI by the central bank suggest that for the coming months it would hover above 9 percent. Taking cues from this forecast, the RBI could stick with the target of reducing inflation first; hence, further rate increases are likely," says Angel.
"The currency maybe wobbly, but unfortunately we all know that the currency at least in the case of India has really not been helpful in propelling the export segment in any way," Pan said in an interview to CNBC-TV18.
The European Central Bank (ECB) is expected to cut interest rates next week but that won't do much to pull the euro zone economy out of recession, a Reuters poll of 76 economists showed on Thursday A narrow majority expected a rate cut of 25 basis points
CARE Ratings has come out with its report on "Expectations of Monetary Policy: October 2012." According to the rating agency, the RBI is scheduled to announce its Q2 review of monetary policy on 30th October 2012. The RBI is expected to keep interest rates unchanged while reducing the CRR by 25 bps.
ICRA has come out with its report on RBI's Annual Policy Statement for FY 2012-13 - April 2012. According to the research firm, the space for further reduction in policy rates is limited and the upside risks to inflation, further Repo Rate and CRR cuts are expected to be restricted to 25 bps each in FY13.
Rajiv Anand of Axis Mutual Fund, in an exclusive interview to CNBC-TV18, said that growth will impacted due to hike in interest rates. “It will not be appropriate to be overly bearish on bonds right now as they may go up by another 5-10 basis points,” said Anand.