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Dun & Bradstreet India expects that RBI may cut repo rate by another 25 to 50 basis points after July 2015.
This expectation is in the context of sharp fall in rupee, some liquidation of debts and equities by FIIs, continued decline in exports, subdued bank credit, rise in stressed asset ratio in the banking system, disappointing earnings of corporates and concerns over the pace of recovery of the economy.
D&B in a report said it expected IIP to have grown by 1 to 2 per cent during April. D&B expected the WPI inflation to be in the range of (-) 2.8% - (-) 2.6% during May. The firm also expected the rupee to average at around 63.40-63.60 per US$ during May. It further estimated that the 15-91 day T-Bill yield to average at around 7.6-7.8 per cent and 10-year G-sec yield at around 7.9-8.1 per cent during May.
Arun Singh, Senior Economist of D&B, said the repo rate might be cut by another 25 to 50 basis points after July 2015 when the impact of the monsoon can be better ascertained and before the US Federal Reserve starts hiking the interest rate.
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