RBI may not cut rates but more stimulus measures likely: D&B
Reserve Bank is not likely to slash interest rates further in near term and government is expected to announce more stimulus measures to revive domestic demand, Dun & Bradstreet said.
By PTI |
MUMBAI: The Reserve Bank is not likely to slash interest rates further in the near term and the government is expected to announce more stimulus measures to revive domestic demand, Dun & Bradstreet said.
"With the policy rates already being at low level and given some potential inflationary threats, D&B does not expect the RBI to lower the policy interest rates in the near term," global information provider said in an economy forecast.
"In the short term, weakness in exports and moderate growth in domestic manufacturing activity will continue to weigh on the overall domestic economic activity," it said, adding that there may be more stimulus measures in the forthcoming budget.
In spite of hopes of recovery in the second half of FY10 on the back of positive IIP numbers, there is need for caution as a sustained recovery in the economic activity would require substantial improvement in manufacturing sector backed by revival in the domestic demand conditions, D&B said.
"Thus, the government is expected to announce more stimulus measures in the forthcoming Budget. Moreover, the foreign fund inflows are expected to resume, providing some support to the domestic investment and industrial activity going forward," it said.
India's inflation slipped to 0.13 per cent for the week ended May 30, lowest ever in over three decades, which could spur the process of rate cuts by banks.
"With the policy rates already being at low level and given some potential inflationary threats, D&B does not expect the RBI to lower the policy interest rates in the near term," global information provider said in an economy forecast.
"In the short term, weakness in exports and moderate growth in domestic manufacturing activity will continue to weigh on the overall domestic economic activity," it said, adding that there may be more stimulus measures in the forthcoming budget.
In spite of hopes of recovery in the second half of FY10 on the back of positive IIP numbers, there is need for caution as a sustained recovery in the economic activity would require substantial improvement in manufacturing sector backed by revival in the domestic demand conditions, D&B said.
"Thus, the government is expected to announce more stimulus measures in the forthcoming Budget. Moreover, the foreign fund inflows are expected to resume, providing some support to the domestic investment and industrial activity going forward," it said.
India's inflation slipped to 0.13 per cent for the week ended May 30, lowest ever in over three decades, which could spur the process of rate cuts by banks.
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