RBI likely to cut rates by 50 bps in 2008: Goldman Sachs

MUMBAI: RBI may cut benchmark policy rates by 50 basis points to boost slowing growth but it is unlikely to do so in its next policy review on April 29 as inflation concerns persist, Goldman Sachs said on Monday.

"The macro environment is worsening with growth slowing and inflation rising," Tushar Poddar and Pranjul Bhandari, economists at the bank said in a note. The benchmark wholesale-price inflation index printed in at 5.11 per cent in early March, staying above the RBI's comfort zone of 5 per cent for the second week in a row due to elevated food prices and rising manufactured prices.

Industrial output in January grew 5.3 per cent from a year earlier, well below economists' expectations and the previous month's 7.7 per cent.

"A weaker-than-expected industrial production growth of 5.3 percent year-on-year in January has increased prospects for an early rate cut," it said.

Source : TET