MUMBAI: RBI may hold rates steady at a scheduled policy review on Oct. 24 but may cut rates again in the near-term to shore up growth prospects, Deve lopment Bank of Singapore (DBS) said in a research note.
The next rate cut, after a surprise 100 basis point reduction in the repo rate on Monday, may come at least a few weeks later, if oil prices continued to tumble and growth in major economies slowed sharply, DBS said on Tuesday. "That elections are around the corner, also tilts the balance towards a dovish policy stance," it said in a morning note. "...the next rate move might come at least a few weeks later." The central bank may cut rates by 50 basis points in the fourth quarter of 2008 and another 50 basis points in the first quarter of 2009, DBS predicts. For a factbox on the various liquidity measures taken by policymakers until now. On Monday, the central bank unexpectedly slashed its key lending rate for the first time in more than four years in a fresh attempt to shield the economy from the global financial crisis. Another rate cut, days after Monday's surprise move, may send a wrong signal to the markets, DBS said. "It may be interpreted as a sign of some greater trouble, probably with the nation's banks or corporate sector and thus hurt confidence," it added. Source : Economic Times --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
