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BofA Securities expects two more rate cuts by March 2020

Updated : June 13, 2019 11:58 AM IST

The Reserve Bank of India (RBI) is likely to cut the repo rate twice by March 2020 bringing it down by 50 basis points in total, said Indranil Sen Gupta, India economist at Bank of America Merrill Lynch.

“We are looking at one in August assuming the rains are normal, then the RBI could go into a pause if inflation goes up on base effects. We think it can touch 5 percent for a few months and as that abates, another 25 bps in the March quarter; so 50 bps in all,” said Gupta in an interview with CNBC-TV18.

On GDP front, he said, “We are looking at 7 percent growth number with a back-ended jump to around 7.5 percent assuming that the RBI continues to cut rates, it continues to provide liquidity...”

Speaking about Jalan committee's report on capital framework, he said, “As of now, Mr Jalan has said that the report will be with the government by end June and I think the government will act accordingly."

"We expect Rs 1 lakh to Rs 3 lakh crore transfer from the Reserve Bank of India (RBI)," he added.
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