RBI to review Credit Policy Tomorrow, Scope for Rate Cut?

Tomorrow, the Reserve Bank of India (RBI) will review credit policy, and speculations are buzzing around of possible rate cut. Headline inflation has been moderated, macro-economic indicators favor a rate cut.

Today stock markets ended in flat, BSE Sensex was down by 60 points at Nifty was down by 45 points. But, in the intra-day trading markets were down heavily following weak global cues.  Last week markets were full of volatile but gained by margin.

Tomorrow, the apex bank would review the macro-economic indicators and may come up with a rate cut announcement. Investors would be watching putting their fingers crossed. There are possibility of high returns from the market, if the apex bank favors a cut in the key interest rates  - repo rate, reverse repo rate and cash reserve ration.  On the contrary, the market would nose-dive, if there would not any rate cut announced by the apex bank.

Another big concern about the manufacturing sector's performance. The statistics issued by the government were not convincing for the investors to have confidence on the market. It may trigger a loss any time, and foreign investors would pull out their funds from the market.

In the international market, all the factors are conducing for a possible rate cut - oil prices are falling, EU announces stimulus - Greece issues also most solved, EU to host trade meet with India, China's economy has been growing slowly and the big thing is that India has become partner with US.

A perfect situation for the apex bank to consider for right move to keep the interest of the economy and investor. There is scope for possible rate cut tomorrow and if that happens so then markets would further touch to new high. Lets wait and watch - what RBI decides for us.