Expect 50 bps rate cut by RBI in H1, 2015: Goldman Sachs

Sounding bullish about the rate cut prospects in 2015, Goldman Sachs said that it expects a 50 bps rate cut by the Reserve Bank of India (RBI) in the first half of 2015.

“We expect RBI to cut rates by 25 basis points each in February and April. The main driver of this view is our commodities team’s forecast of weak oil prices through Q2 2015,” Goldman Sachs said in its research note.

The recent sharper than expected fall in headline inflation, contained core prices, and no sharp increase in food prices, despite a weak monsoon, buttress the change in our rate view, Goldman’s Tushar Poddar said in the note.