(ET)
The Reserve Bank of India is expected to cut benchmark interest rates for the fifth time this year on Friday as recent fiscal measures to boost ailing growth seem largely inadequate and benign inflation offers room for more easing.
The RBI is predicted to lower its key lending rate or the repo rate by 25 basis points (bps) to 5.15%, which would take cumulative cuts so far this year to 135 bps. Most analysts forecast one more cut of 15 bps in December. Some RBI watchers expect a larger cut this week, after it cut the repo rate but an unconventional 35 bps in August.
“With current inflation remaining benign, we expect RBI to opt for a 40 bps rate cut at its policy review later this week in a bid to continue its support towards growth revival,” said Yuvika Oberoi, an economist with Yes Bank in Mumbai.
