Barclays Capital feels that Reserve Bank of India (RBI) may reduce policy repo rate by another 50 basis points by mid 2013 in order to support economic growth.
The brokerage interpreted RBI’s policy statement on March 19 as being “balanced”, and not the hawkish tone that markets have interpreted.
In a research note, the firm said it reads the policy statement as balanced, and in an environment of weak growth and softer core inflation, it expects the RBI to lower the repo rate eventually by another 50 bps by mid-2013.
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