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RBI in 'wait and watch' mode on inflation, don't expect a rate cut now

Will RBI lower rates in the year? The answer is definitely yes, though timing may be uncertain.

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RBI Governor Urjit Patel (second from left) with Deputy Governor Viral V Acharya, Executive Director M D Patra, Deputy Governors S S Mundra, B P Kanungo and N S Vishwanathan at the central bank’s bi-monthly monetary policy review in Mumbai on Thursda

Madan Sabnavis

Last Updated : Aug 02 2017 | 2:22 AM IST

The RBI policy has been on expected lines with no change being reckoned on the policy rates. However, the cut in SLR comes at a time when banks have been flushed with excess liquidity in the region of Rs 3.5-4 lakh crore in the last 2 months. Hence, it is not so much as providing them with a window to get more liquidity as much as helping them with their LCR requirements as it takes on the target of 100% by 2019.

Now credit policy has been linked inexorably with CPI inflation which has been moving downwards. Here the RBI’s

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