The prospects of monetary easing in the mid-quarter policy review on June 18 brightened on Friday. Apart from falling commodity prices and an economic slowdown (on Friday’s Brent crude price fall and yesterday’s GDP growth figures were the most immediate reasons), the market took comfort from Reserve Bank of India (RBI) Deputy Governor Subir Gokarn’s comments in Kochi on Friday. Gokarn said though the slowdown had been in line with the RBI’s expectations, slowing GDP growth and the oil price fall provided more room on rates. He also said the growth slowdown was accompanied by a fall in core inflation and reiterated the need for a rate reversal to support growth.......
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