The Reserve Bank of India (RBI) said in a statement today a repo rate could not be expected either now or for quite some time till the monsoon and inflation situations became clearer.
Commenting on the 50 basis point cut made by the European Central Bank (ECB) yesterday, a move that renewed market speculation that a repo rate cut was imminent, an RBI spokesperson stated that the rate of inflation in the main euro countries was in the range of 2 per cent against 5.9 per cent in India on May 17, 2003.
However, the market is still hopeful of a repo rate owing to the interest rate differential between the rupee and other currencies. For the last two days, government security prices rallied, rising by 40-50 paise across maturities.
The yield on the benchmark 10-year paper
