See RBI cutting rates by a further 50-bps before year 2015 is out: Keki Mistry, HDFC

ET Now caught up with Keki Mistry, HDFC, for his views on the latest RBI rate cut. Excerpts:

ET Now: Are you surprised with the timing of the rate cut? What do you think will happen now to banks' rates?

Keki Mistry: The rate cut was pretty much expected. I said immediately after the Budget that if inflation remains under control, a rate cut would come despite the fiscal slippage in Budget 2015.

ET Now: How positive a move is this by the RBI? What are your expectations going forward?

Keki Mistry: It was at the start of 2015 that I had said we would probably see about a 100-bps reduction in interest rates in the course of the calendar year. Of that 100 bps, we have now seen 50 so far. I expect the balance 50 bps to happen during the remaining part of the year.

However, it is very difficult to exactly time these things. But I still expect it to happen.

As of now, notwithstanding the fact that the fiscal deficit is a little higher than what was originally expected, inflation expectations continue to remain low. It's because of this fact that the RBI was comfortable in terms of cutting rates.