With reference to "RBI may pause this time, but rate cut likely in Dec" (September 26), the "outcome" of a poll conducted by Business Standard that involved key bankers, economists, rating agency executives and bond market players amply indicates that the Reserve Bank of India (RBI) may maintain status quo when the newly constituted Monetary Policy Committee (MPC) meets at its bi-monthly monetary policy review on October 4. It gains more significance as there is no marked unanimity amongst them over what could possibly be the final call of the new incumbent at the central bank on this matter.
However, it's strongly felt that the views of Upasana Bhardwaj, senior economist with Kotak Mahindra Bank, are most convincing in the economic scenario. At the same time, I beg to differ with Soumya Kanti Ghosh, chief economist with State Bank of India though he is confident of a 25-50 basis point rate cut in the ensuing meet. Perhaps, he may be sounding "over-optimistic" as no one else is toeing his line which calls for a huge cut, that too in one go. Incidentally, the new incumbent at the RBI has reportedly down played the risk of inflation and harped on the focus on growth while exchanging his views with half-a-dozen economists last week. Why the sudden change of heart at Mint Road?
In any case, all this must have been music to the ears of Arun Jaitley, our "growth"-centric finance minister. One really wonders whether Dr Urjit Patel would be obliging him with a memorable "return gift" (a rate-cut) on October 4 for his "generosity" in preferring him (Patel) to several other key contenders for the coveted position. Mind you, the government has already named its three nominees on the newly refurbished MPC. Let us wait and watch for D-Day.
S Kumar New Delhi
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