Analysts expect 0.25-0.50 per cent rate cut

With finance minister Arun Jaitley sticking to his fiscal deficit targets, an HSBC report claim that RBI may go for a 0.25 per cent rate cut.

“This was not easy for a government which was trying to protect growth as well as preserve macro stability. Yet, it bit the bullet,” the report added.

In a research note, Switzerland-based UBS said: “We now expect 0.50 per cent of rate cut in calendar year 2016 .”

However, the banking major feels the fiscal consolidation is of poor quality as more than half of it is due to dives-tment or spectrum sale. This does not increase the savings for the private sector.