Photo: PTIMumbai/New Delhi: While traders are betting that India’s surprise cash clampdown will open room for governor Urjit Patel to cut interest rates again, economists are more circumspect. “Therefore, a repo rate cut this time is not on—even as inflation is low.”The ability to support growth without being forced to lower the policy rate buys Patel time to analyze the impact of a Donald Trump presidency. Swap traders are pricing in the prospect of a quarter-point cut in the Reserve Bank of India’s rate in 2016. Indians have until 30 December to swap their worthless currency for new notes or deposit them into bank accounts. “The currency decision is unlikely to have a material impact on the RBI’s policy decision next month.” Bloomberg

Source: Mint November 15, 2016 05:03 UTC