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RBI monetary policy: A rate cut with change in stance likely

Updated : June 06, 2019 08:11 AM IST

After two successive rate cuts in February and April, what can one expect this time from the Reserve Bank of India (RBI) policy? With growth hitting its lowest level in 5 years, the chorus for a rate cut is getting louder. Majority of market participants polled by CNBC-TV18 for a survey expect a rate cut. CNBC-TV18’s Latha Venkatesh gives an editor’s take.

The rate cut is in the bag and 50 basis points (bps) is a minority and it may not be resorted to because the previous 50 bps have not been transmitted.

The point about liquidity will be the more important issue to look at. The story that has been running on CNBC-TV18 is that liquidity is already in surplus since June 1. So the old liquidity grouse is already gone and the RBI will actually now talk the walk. It has already walked by doing open market operations (OMOs) and stuff like that. So it is likely to give the stance as accommodative and in various other ways try to say that the current surplus liquidity will be kept that way.
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