TIWN
New Delhi/Mumbai, June 5 (TIWN) A booster dose in the form of further rate cut is expected from the Reserve Bank to rekindle economic growth which has been stunted by low demand, receding production and stagnant wages.
Economy watchers contend that subdued food prices coupled with growth concerns allows RBI to aggressively cut key lending rate. Market observers have prescribed a range between 25 and 50 basis points to bring down the cost of finance and give impetus to consumption growth.
Overall, the apex bank might cut repo rate by 75-100 basis points throughout this fiscal, if inflation target remains in sight. RBI's medium-term target for consumer price index (CPI) inflation is of "4 per cent within a band of +/- 2 per cent". "Slower growth and lower inflation has given the RBI room to go in for a repo-rate cut," Sunil Kumar Sinha, Director -- Public Finance and Principal Economist India Ratings and Research (Fitch Group), told IANS.
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