MUMBAI: The Reserve Bank of India (RBI) needs to go for a larger rate cut, of more than 25 basis points, in its June monetary policy review to reverse the current economic slowdown, said an SBI research report. The RBI had cut the key short-term lending rate (repo) by 25 basis points each in its last two policy reviews. The apparent nervousness is clearly reflected in the trends exhibited in key stock indices," said the SBI's research report 'Ecowrap'. Perhaps, significantly depressed rural prices is disturbing rural income and weak demand is affecting the FMCG sector, the report said. To this end, "We are thus penciling a larger rate cut (in excess of 25 bps) by RBI in the forthcoming policy".

Source: Mint May 15, 2019 07:30 UTC