The Reserve Bank of India (RBI) is preparing to unveil its annual monetary policy on Tuesday. Most analysts expect the apex Bank to ease key policy rates.
Between 20 October and 4 March, RBI governor D. Subbarao slashed policy rates five times, but left them untouched in both the October and January reviews.
With wholesale price inflation is heading towards zero, this is seen as an opportunity for the RBI to cut repo and reverse repo rates to shore up credit growth. The Wholesale Price Index rose 0.18% in the 12 months to 4 April.
“Given the substantial moderation in inflation of primary food articles and a strong statistical base effect, the headline inflation is expected to ease further and touch sub-zero level in Apr-09,” said Kaushal Sampat, COO, Dun & Bradstreet India.
“In view of these developments, the RBI is expected to announce more monetary measures including reduction in key policy rates in its forthcoming monetary policy review,” Sampat adds.
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Click here to read expectations of Dun and Bradstreet India