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Majority of market participants do not think that the Reserve Bank of India will cut policy rates in its quarterly monetary policy review on July 31, according to a survey conducted by Royal Bank of Scotland.
The survey is based on 113 responses from the bank’s corporate clients and other financial institutions, including banks, insurance companies and mutual funds.
Seventy-five per cent of the respondents expect no change in the central bank’s monetary policy stance. Further, 83 per cent think that the CRR (cash reserve ratio), or the slice of deposits that banks keep with the central bank, will be unchanged.
Most participants expect the policy rates will be cut by 50 bps by March 2013.
The central bank has indicated in different forums that inflation will dictate its monetary policy stance.
satyanarayan.iyer@thehindu.co.in
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