InvestorQ : Why there is an anticipation of RBI to cut rate in April 2019?
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Why there is an anticipation of RBI to cut rate in April 2019?

Answer
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1 year ago


Slow growth of the Indian economy might be the reason for Reserve Bank of India’s (RBI) monetary policy committee to think on the rate cut. It is expected that RBI governor Shaktikanta Das might announce a 25-basis point cut in the repo rate. Repo rate is the rate at which the RBI lends money to commercial banks. If RBI reduces the repo rate then banks will be able to get more money supply at less rate and so the lending to the customers or public can be at a lower rate, thus boosting the economy. So, banks are anticipating for a rate cut on April 4, 2019, when RBI’s policy for FY20 will be announced. As banks will be able to give loan at lower interest rate thus increasing the lending base. You can expect an increase in the price of the Bank sectors scrips.