A rate cut by RBI now will quickly transmit to cuts in bank lending rates with open market operations by RBI finally extinguishing the money market deficit," the investment bank said. There is complete unanimity among experts that RBI will stand pat on key policy rates while maintaining a dovish outlook. It sees the money market slipping into the deficit zone again with RBI calling off its next open market operation and a busy season ahead for the money market. High lending rates: BofA-ML argues that real lending rate in India is at a 20-year high and blamed it for the slow credit offtake. "We see three compelling reasons for RBI governor Rajan to cut interest rates by 25 bp on Tuesday.

Source: Economic Times August 09, 2016 02:37 UTC