Monday, December 17, 2012

Choice is between 25 bps cut in CRR or policy rates

.......RBI may need to shift its bias from inflation to growth this time but may find it tough to defend rate cut delivery against its firm stance of caution against elevated inflation and low real interest rates. While it will be easy and straight-forward for RBI to deliver 25 bps CRR cut to cover advance tax outflows and maintain dovish stance on the way forward, RBI may also consider the other option of delivering 25 bps rate cut with caution on inflation. There are four options before RBI:..........

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