RBI likely to reduce repo rates by 25 bps on October 4: Goldman Sachs

RBI likely to reduce repo rates by 25 bps on October 4: Goldman Sachs

On Monday according to the information said by a source, the RBI is expected to go for a further rate cut in the ensuing monetary policy review meet amid weak economic activity and being inflation.

In October the RBI is likely to cut the policy rate by 25 bps and another 25 bps in December according to the information said by a source.

The Source said that there is a belief that the RBI Monetary Policy Committee(MPC) will almost certainly cut the policy repo rate on October 4 th.

On October 4 th the central bank which has already reduced the key policy rate four times in the current calendar year is scheduled to announce its next bi-monthly monetary policy.

According to the report, the facilitating cycle is relied upon to stop after an additional 50 bps as by December feature CPI expansion is required to remain at near 4 percent, decreasing a case for further facilitating to proceed.

Besides, the Reserve Bank of India (RBI), which has been increasingly responsive to global and domestic growth concerns, may get some comfort from the recent cut in corporate tax rates, the report noted. 
According to the information said by a source, RBI is expected to reduce its growth forecasts from 6.9 percent to somewhere in the range of 6.0 percent to 6.5 percent.
In the first quarter of 2020, the downward revision mainly reflected lower than expected activity indicators, In the second quarter lower sequential momentum, compared to our earlier assumptions, said in a report.
India’s economic growth has slumped for the fifth straight quarter to an over six-year low of 5 percent in the three months ended June as consumer demand and private investment slowed amid a deteriorating global environment. 

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