Expectations high for upto 0.50% rate cut by RBI

With inflation under check and government sticking to its fiscal consolidation path, market expectations are that RBI may cut interest rate by up to 0.50 percent in its first bi-monthly monetary policy review for 2016-17 on Tuesday in order to propel growth. The government has also pared the small savings interest rate by up to 1.3 percent providing cushion to the Reserve Bank for cutting the policy rate.

Finance Minister Arun Jaitley too had last week expressed desire that the RBI should cut rate, stating "I want what everybody wants. At this stage if rate cuts do take place it's certainly going to be helpful because you need a more efficient economy and you need a more competitive cost of capital".

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