RBI ready for policy gear shift to enter growth lane
Expectations of a policy rate cut in end-January – perhaps by as much as 50 basis points – boosted the sentiment in the stock market driving up the Sensex by120 points to 19,364.75 points. The bond markets were comforted by the assurance of adequate liquidity and the yield on the benchmark bond stayed more or less flat at 8.15%.
Most bankers, however, are likely to wait for a signal from the central bank before trimming lending rates despite the fact that loan growth has been muted. State Bank of India (SBI) chairman Pratip Chaudhuri told a business channel that demand for loans from companies remained sluggish while Aditya Puri, MD& CEO, HDFC Bank said base rates would come down as soon as costs were lower.
The central bank’s comments on growth — it believes there have been signs of
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