Interest rate likely to fall in April -June, 2012: Nomura

According to global credit rating and research firm Nomura, Inflation in India is likely to moderate as per the RBI's (Reserve Bank of India) projection, while the growth is expected to fall, prompting the apex bank to start interest rate cuts from the second quarter  (April -June) of 2012,

Nomura said in its latest issue of ‘Asia Economic Alert’, “We share the view on the near-term inflation trajectory with the RBI and believe that the rate-hiking cycle is over. Falling economic growth numbers may also prompt the RBI to go for rate cuts. We expect the RBI to start cutting policy rates in second quarter (Q2) 2012, as growth is likely to deteriorate in the next few quarters”

 RBI, in its mid quarterly economic review earlier this month, it hinted at rate cuts in future.  RBI had increased rates 13 times since March 2010 to tame inflation.

The banking regulator kept its key policy rates unchanged during the last review. It retained its year-end inflation projection at 7%, while stating that it will make a formal assessment of its inflation projections for 2011-12 in the third quarter review in January, 2012.

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