A survey conducted by Royal Bank of Scotland (RBS) reveals that majority of industry hopes that Reserve Bank of India will slash policy rates by at least 25 basis points (bps) in its forthcoming monetary policy review.
The central bank is scheduled to release its monetary policy review for the third quarter on January 29. 2013. Earlier, RBI Governor D. Subbarao had expressed that though inflation may have reduced but it was still high enough.
On the matter, RBI has stated in its quarterly policy review, "The market is overwhelmingly poised for a rate cut, with more than 80 per cent of the 109 respondents expecting a 25-50 basis points cut in the repo and reverse repo rates."
The survey had covered more than 60 industry clients of the foreign bank, plus, more than 40 respondents from banking institutions, mutual fund based firms and insurance firms.
Most of the respondents believed that RBI will slash policy rates by about 25 basis points prior to March 2013 and to do an encore by the end of December 2013.