RBI seen to pare policy rates by 50 bps

“The government is expected to take more fiscal measures to revive the domestic demand and interest rates may come down further by at least 50 basis points,” said EIU Research Director Manoj Vohra in a statement.

The rising fiscal deficit would be a major challenge for the government, it said.
The Reserve Bank in its annual policy review had reduced the repo and reverse repo rates (the interest rate at which banks borrow and lend money to the central bank) by 25 basis points signalling further reduction of lending rates.

In order to boost the economy, the Reserve Bank has also said it will continue to take appropriate measures.

The government too had announced three stimulus packages to neutralise the impact of global financial crisis on country’s economy.