Timing of rate cut by RBI surprising: Mythili Bhusnurmath

Mythili Bhusnurmath, Consulting Editor, ET Now, shares her view on the RBI rate cut. Excerpts:

ET Now: Are you surprised with the 25-bps rate cut by the RBI?

Mythili Bhusnurmath: I am surprised with the timing rather than the action itself. Inflation rates were anyway low; so there was definitely a case for a rate cut.

However, the timing does suggest that the RBI has been unduly influenced by the government’s arm twisting. I say so because the fiscal deficit position of the government has only worsened in terms of budgetary targets. Hence, the timing of the rate cut does not do much justice to RBI's credibility