NEW DELHI: A flat opening for Nifty50 this morning was reflecting muted expectations from the Reserve Bank of India’s bimonthly money policy review scheduled in the next few hours.
But Twitterati on Dalal Street are not expecting a ‘farewell gift’ from outgoing Governor Raghuram Rajan at last policy review of his tenure.
Rajan, who will step down as RBI’s 23rd governor on September 4, is likely to opt for status quo on policy rate, according to as many as 69 per cent respondents who voted in an ETMarkets.com poll on the always-buzzing Twitter.
Out of the 633 respondents who participated in the poll, only 196 expected the RBI Governor to throw up a surprise with a rate cut of at least 25 basis points, while the majority felt otherwise.
Since the beginning of his tenure in September 2013, Rajan has cut the policy rate by 150 basis points in aggregate. He also came up with steps to push banks to transmit the rate cuts to end users.
While a dominant number of Dalal Street experts expect the RBI meet to be a non-event, some analysts are still hoping against hope.
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“You never know he might give us a nice parting shot in terms of reducing interest rates,” wished Andrew Holland, CEO, Ambit Investment Advisors.
“Our view even before he announces the policy decision is that India could easily reduce interest cost by at least 50 bps. Going by what we are seeing globally in terms of interest rate cuts, that is very much doable without having any impact on the currency. So it is really whether he wants to or not,” Holland said.
“If RBI waits till October, it would get too close to the industrial busy season for banks to reduce rates. The passage of the GST legislation should also satisfy RBI’s pre-condition of ‘reforms’ for easing. At the same time, it may postpone demand beyond April as consumers expect lower pricing,” investment bank BofA-ML said in a note.
This brokerage, among all odds, expects RBI to cut policy rate by 25 basis points this time around.