Expectation of RBI rate cut grows stronger after election outcome

The RBI had cut interest rate by 25 basis points each in February 2019 and April 2019 to boost economic growth

With the outcome of elections now known and Narendra Modi – led National Democratic Alliance (NDA) firmly back in the driver’s seat, focus has shifted back to the health of the economy and other fundamental factors.

Amid this, the expectation of a cut in interest rates by the Reserve Bank of India (RBI) in its upcoming three-day monetary policy review on June 03, 04 and 06 has been gaining traction in order to prop up consumption. That apart, analysts also expect the central bank continue injecting liquidity. The government, on its part, should look at recapitalising public sector banks (PSBs), they