The Reserve Bank of India (RBI) is likely to cut the benchmark rate by 0.25 percent in its monetary policy review, research firm Moody’s Analytics said.
This is predicted as inflation is likely to remain subdued due to average rainfall and lower commodity prices.
“The Reserve Bank of India could deliver fireworks in its monetary policy meeting on Tuesday by cutting the repo rate by 25 basis points to 7 per cent,” Moody’s said in a report.
The industry is demanding rate cut to ease the cost of capital.
The wholesale price index (WPI)-based inflation has remained negative for the last eight months. It stood at negative 2.4 percent in June.
The apex bank has cut rate by 0.75 percent in January-June.
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