(TH)
A deceleration in industrial activity and the fear of a global economic slowdown are expected to prompt the Reserve Bank of India to cut the repo rate by 25 basis points in the monetary policy review scheduled on April 4. Retail inflation staying below the RBI’s 4-per cent target is a comfort factor for the central bank to put through a second rate cut on the trot. Market players say a rate cut to support growth will be opportune.
Industrial growth, represented by the Index of Industrial Production, dipped to 1.7 per cent in January from 2.6 per cent in December 2018. Though the retail inflation, as measured by the consumer price index, rose to a four-month high of 2.57 per cent in February against 1.97 per cent in January, the reading is still lower than the RBI’s inflation target of 4 per cent.
