RBI may cut interest rates |
A clear majority to the BJP-led National Democratic Alliance could prove to be a boon for the market as it may pave the way for easier interest rates from the Reserve Bank of India when it announces its second bi-monthly policy for 2019 on June 6th. One of the uncertainties` over monetary policy was the forthcoming budget adherence to fiscal consolidation. Before elections there was a risk of slippage as the NDA`s main rival the - Congress-led United Progressive Alliance - had under its proposed Nyay scheme promised minimum basic income of Rs 72,000. RBI governor Shaktikanta Das had indicated that he will use all possible instruments to ensure liquidity in the markets. However, on interest rates he has also called for more flexibility in policy making by suggesting that in an unpredictable environment, the central bank should not be a prisoner to its stance and should have the freedom to move rates either way. He also said that rate changes need not be in multiples of 25 basis points and the central bank should be able to move rates by even 35 basis points to add nuance to its signal.
|
|
|
|