Moody’s Analytics, a division of Moody’s Corporation, expects the Reserve Bank of India to cut repo rate by 25 basis points on March 19.
Repo rate is the rate at which the RBI lends money to commercial banks. The central bank had last cut its repo rate in January by 25 basis points.
“The recent rumblings from the RBI, including praise for the Government’s reforms and the recent Budget, suggest that a small March rate cut is likely. We expect a 25 basis point cut in the repo rate,” Moody’s Analytics said in a report soon after the February WPI print was issued on Thursday.
There is wide expectation that RBI will go in for a small cut in repo rate despite WPI-based inflation inching up to 6.84 per cent and retail inflation moving up to 10.91 per cent in February.
Arvind Mayaram, Secretary, Department of Economic Affairs, expressed hope that RBI would vote for growth. He also hailed RBI Governor D. Subbarao’s remarks about the recent Budget being a “balanced” one.
Srivats.kr@thehindu.co.in