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RBI is likely to reduce interest rates by 0.25% in June review: Care Ratings

By Religare

Care Ratings said that with India's GDP growth slowing down to a decade low, the Reserve Bank of India is likely to cut its key rates by 0.25 per cent at policy review meet on June 17.

In a note, Care Ratings said, "With WPI (wholesale price index) headline inflation moderating and falling below 5 per cent, the RBI, seeking to balance a growth-inflation trade-off, now appears to be focusing on the former."


"There is a higher likelihood of the RBI reducing interest rates by another 0.25 per cent in the June review," it added.

The note, written after the release of official data pointing to growth declining to 5 per cent for FY 2013, however, said the central bank would opt for a status quo in case the headline inflation and the current account deficit (CAD) figures go beyond its comfort zone.

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