RBI has room for further rate cuts : Subir Gokarn

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With about a fortnight left for the Reserve Bank of India's (RBI) next Monetary Policy Review , the Deputy Governor Subir Gokarn said the apex bank has some room to reduce policy rates on the back of moderation in core inflation and soft global oil prices.

Terming the liquidity in the banking system to be in "comfort zone", he threw light on the drop in banks' daily borrowings from the Reserve Bank of India and steady overnight cash rate. As per him, the apex bank is flexible for buying bonds through open market operations if liquidity is seen under some pressure.

Meanwhile, talking about the slowdown in the Indian economy, Gokarn added that the lower-than-expected economic growth at 6.5 per cent in FY12, and 5.3 per cent in the fourth quarter ended March 2012, are estimated to have impact on the central bank's projection of GDP growth for the 2012-13 fiscal year that began in April.

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