RBI has ‘elbow room’ to cut rates: Gokarn

Jun 04, 2012 |

Reuters

mumbai

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The Reserve Bank of India (RBI) has some room to reduce policy rates following a moderate core inflation and soft global oil prices, a deputy governor said on Monday.

Subir Gokarn was speaking to a television channel on the sidelines of a investor conference in Mumbai.

The 10-year benchmark bond yield fell to its lowest level in two-and-half months at 8.31 per cent in early trade on expectations of a rate cut as early as this month.

The Reserve Bank of India will announce its mid-quarter policy review on June 18.

Gokarn added that the lower-than-expected economic growth will have some bearing on the RBI's projection of GDP growth for the 2012-13 fiscal year that began in April.

India's economic growth slumped to 5.3 per cent - its lowest level in nine years - in the first three months of 2012 from a year earlier, marking a dramatic slide in the fortunes of a country whose economy was boasting nearly double-digit growth before the global recession.

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