Bank of America Merill Lynch sees 0.25% rate cut to tide over note-ban impact on GDP
Bank of America Merill Lynch expect the Reserve Bank of India to cut rates by 0.25% in the monetary policy meet on February 8, 2017.
To reverse the impact of the demonetisation drive to growth prospects, the Reserve Bank of India (RBI) will cut rates on Wednesday as well as in the April policy review, foreign brokerage Bank of America Merill Lynch said on Tuesday.
"We continue to expect the RBI's monetary policy committee (MPC) to cut the rates by 0.25% on Wednesday and in April with demonetisation hurting growth," it said.
The brokerage said 60% of 2,000 respondents surveyed by it reported that they have been impacted by the note ban and attributed the "surprising" November industrial growth of 5.6% to lower base effect.
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