Interest rate cut by RBI on March 19 likely: BofA-ML
previous month.
However, the BofA-ML report warned inflation may touch 7.5 per cent during the second half of next financial year.
On the RBI's open market operations (OMOs) to tide over liquidity deficit, which this week has touched a whopping Rs 1.4 lakh crore, the report said the central bank is likely to pump in Rs 20,000 crore more through OMOs into the system in the remaining period of the fiscal.
"We continue to expect OMOs/CRR cuts and base effects to push up deposit growth to 15 per cent by March from 13 per cent now. High lending rates should continue to pull down lending rates to 14-15 per cent from 16 per cent now."
An OMO is an activity by a central bank to buy or sell government bonds on the open market.
In this backdrop, the lending rates are likely to come down by an additional 0.75 per cent next financial year beginning April atop the 50-75 basis points in FY'13, it said.
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