The Reserve Bank of India (RBI) will declare its mid-term credit policy analysis today (18-06-2012).
Majority of bankers and economist say that the RBI will cut repo rate (RR) and reverse repo rate (RRR) by 25 basis points. This means home loan could become cheaper.
Cash reserve ratio may remain unchanged at 4.75 % and the repo rate, which is the rate at which the RBI lends to banks, is currently at 8 %. The reverse repo rate at which the RBI borrows from banks is currently at 7 %.
Finance Minister Pranab Mukherjee has also spoken confidence that the central bank would “adjust the monetary policy” to address the challenges before the economy.
Most of the professional feel that more or less the market has already factored in 25 basis points cut in both repo rate (at which banks borrow money from RBI) and cash reserve ratio, the portion of deposits that banks are required to keep with the Reserve Bank.