A softer stance would bode well for Prime Minister Narendra Modi’s government, which wants to boost lending and lift growth as it faces elections by May. Nearly half of respondents expected a 25 basis point rate cut by mid-2019. “The actual cost of borrowing is very high for the productive sector and there is heightened uncertainty about the health of the financial sector. However, for the central bank, cutting rates to support the financial sector by taking comfort from the sharply lower inflation rate might not be as simple as it sounds. “Despite the pressures, I don’t think RBI will rush through to ease rates,” she said.

Source: Dhaka Tribune February 05, 2019 16:30 UTC