h contrary to expectations. Photo: Aniruddha Chowdhury/Mint
Slowing inflation and a fiscally responsible budget may sway the Reserve Bank of India (RBI) to cut interest rates on Wednesday, according to a Mint survey of economists from 10 banks.
Seven out of 10 bank economists expect RBI to cut its repo rate by 25 basis points to 6% when the central bank’s monetary policy committee meets on 7-8 February for the bimonthly credit policy. The other three expect the repo rate to remain unchanged. A basis point is one-hundredth of a percentage point.
RBI has already surprised the market twice: in October 2016 governor Urjit Patel announced a 25 basis point reduction when the market was widely expecting a status quo. And in December, the banking regulator kept interest rates unchanged against a popular expectation of a rate cut.
