MUMBAI: Will there be a rate cut in the near future on ebbing inflation or will the RBI look at current phase as transitory and hold for long? Analysts were today a divided lot on future moves of the Reserve Bank.
Bank of America Merill Lynch said the Monetary Policy Committee’s (MPC) concerns on inflation are dissolving given the cut in its outlook to 3.5-4.5 per cent band in H2FY17 as against 5 per cent earlier, and expected a rate cut at the next review on August 2 if the rains are good.
Economists at Singaporean lender DBS said the “dovish policy stance renews the possibility of more monetary easing” and forecast a cut of up to 0.50 per cent by March 2018 as against its earlier expectation of no cuts.
Domestic brokerage Edelweiss concurred, saying it also expects a cut of up to 0.50 per cent in remainder of FY18.
However, analysts at Japanese brokerage Nomura and British brokerage HSBC felt otherwise.
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