But it could easily lose top spot if some of the more pessimistic views that suggest growth could halve post-demonetisation come true.It could also drag inflation down. One said the RBI would slash rates by 75 bps. although a Reuters poll this week showed it is unlikely to continue falling.The deluge of cash pouring into banks has resulted in excess liquidity, which the RBI tried to mop up with a temporary hike to its reserve requirements last week. "With the banking system flush with liquidity, monetary policy transmission should be better in the months ahead. "The RBI put its credibility on the line by cutting rates the last time in October when there were still concerns that it wouldn't meet its inflation target," said Shah of Capital Economics, adding: "that is a clear departure from how monetary policy was run under the previous governor Raghuram Rajan."

Source: Economic Times December 03, 2016 07:30 UTC