In the recent monetary policy review, the Reserve Bank of India reduced the Cash Reserve Ratio (CRR) by 50 basis points but kept the interest rates unchanged. Leading foreign sector lender in the country, Barclays does not expect any rate cut before April.
In its "The Emerging Markers Weekly" report, Barclays Capital said, "We continue to see risks of a 25 basis points repo rate cut at the March mid-quarter policy review, while maintaining our base case that the rate-cutting cycle will start in April."
"We maintain our view of a slow but calibrated reduction in policy rates in 2012-13. However, given the ongoing pressures on liquidity, another 50 basis points cut in the CRR in March cannot be ruled out at this stage, "It also said.
It however expects that the CRR may witness further decreases in the meantime.
"The RBI expects a modest rebound in growth in 2012-13, along with marginally lower inflation, which we again sense is something that can broadly be achieved," the report said.