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There may be another cut in July, say experts

The RBI cut its policy interest rate by 25 bps today for the third time since January

Reuters Mumbai

The Reserve Bank of India (RBI) cut its policy interest rate by 25 basis points on Friday for the third time since January, as expected, as growth slows and inflation ebbs, but said there is little room to ease monetary policy further.

Here is what the experts have to say about RBI's stand:

A. PRASANNA, ECONOMIST, ICICI SECURITIES, PRIMARY DEALERSHIP LTD, MUMBAI

"I think the RBI is still accommodating, and when they say there is little room to cut, it suggests there is one more cut, maybe not in the next policy review but possibly in July provided inflation continues to come down.

 

"I think the HTM (hold-to-maturity) cut is spaced out, maybe immediately it could be a little negative, but the way it is being implemented, I think the market should be able to absorb it. But with supply pressure in May, there could be some upward pressure in yields."

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First Published: May 03 2013 | 11:14 AM IST

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