 "RBI may cut interest rates by 100 bps this year. Here's why")
The Central Statistical Organisation (CSO) projected the real growth rate at only 6.9 percent, the worst since 2008-09 and a tad lower than the latest forecast of 7 percent by the Reserve Bank of India. Robert Prior-Wandesforde, head of India & South East Asia economics at Credit Suisse spoke to CNBC-TV18 about why the RBI is likely to cut interest rates by around 1– to 150 basis points this year.
Prior-Wandesforde sees a continuous downtrend in inflation but says that the RBI is still going to cut rates by 100 basis points this year. He expects agricultural growth estimates to be stronger and that the industrial sector has now bottomed out.
Prior-Wandesforde predicts that the January inflation number will fall below 6 percent and hopefully, remain around those levels.Subdued inflation combined with another 6-9 months of sub-7 percent GDP growth will see the RBI deliver a meaningful rate cut, perhaps in the order of 150-200 basis points.
Watch the full interview on CNBC TV 18 :
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