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India

Bank Policy Tuesday: RBI cuts rates in CRR and bank rate by 25 bp

Indian rupee collection

Indian rupee collection (Photo credit: Wikipedia)

RBI thinks inflation momentum measures are showing enough control to allow for a bank rate cut while it will be monitoring further conditions related to momentum measures including controlled International commodity cycles et al . the issue as always in this cycle, has been non manufactured products inflation which continues at high levels despite more than a year of low core inflation

As Demand is still flagging and investment outlook still deep ended by scarcity of viable and interested Capital for India, despite policy measures, it is a good sign for markets which have already applauded big ticket banks while the  Rupee has gained 13 p on the day on announcement of the RBI Governor’s measures in his last year as governor

RBI expects inflation to remain rangebound at current levels allowing monetary policy intervention again as a key instrument of the bank’s policy in the next fiscal.

 

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