BoA-Merrill Lynch expects RBI to cut CRR instead of repo rate

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Bank of America-Merrill Lynch is expecting the Reserve Bank of India (RBI) to cut cash reserve ratio (CRR) by 25 basis points instead of repo cut in its policy review meet.

This expectation of BoA-Merrill Lynch is based on its assumption that the central bank will not want any controversy by cutting rates when the rupee is just stabilizing.

The investment bank believes that RBI will now try to hold the rupee in a 54-58/dollar band, assuming the US dollar stabilizes at 1.30-1.20/euro band.

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Story first published: Thursday, June 13, 2013, 23:10 [IST]
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