RBI Policy Review - Rate cuts likely from April ::Edelweiss PDF link

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In the mid-quarter monetary policy review, the Reserve Bank of India (RBI) has maintained status quo, as expected. The accompanying statement is on the hawkish side, highlighting inflation risks. However, inflation concerns are now emanating more from supply side (crude prices, suppressed inflation etc) rather than the demand side where price pressures are clearly receding. Given that investment slowdown is deepening and core inflation easing, RBI may embark upon a rate cut cycle in April as policy transmission happens with a significant lag. Besides, the Union Budget 2012 is likely to bring some fiscal consolidation, comforting RBI. The pace of rate cuts will, however, continue to depend on evolving inflation-growth dynamics.

RBI Policy Review - Rate cuts likely from April