India Inc doesn't see RBI lowering rates: Survey

A majority of corporates and financial institutions do not expect any changes in key policy rates by RBI's in its quarterly monetary policy review next week, a survey by Royal Bank of Scotland said on Thursday.

"An overwhelming 75 per cent expect no change in the repo and reverse repo (short-term lending and borrowing) rates in this policy meeting, with the remaining 25 per cent expecting a cut of 25-50 bps (0.25-0.5 per cent)," the client survey, involving 113 corporates and financial institutions by RBS, said.

Similarly, 83 per cent of the respondents said there will be no cut in the cash reserve ratio (CRR), or the amount of deposits banks have to park with the RBI, it added.

The corporates are of the view that high inflation and no initiatives from the government leave little room for the apex bank to act proactively.

Among the total clients surveyed, 54 per cent of them are corporates and the balance from other financial institutions including banks, insurance companies and mutual funds.

RBI will unveil the first quarter monetary policy on July 31. The industry is clamouring for rate cuts.

While GDP growth hit a nine-year low last fiscal at 6.5 per cent, inflation remains elevated at 7.25 per cent for June.

Despite the poor GDP number, RBI left its policy rates and CRR unchanged at the last meeting on June 16.

On the rupee-dollar front, the survey offers some relief, saying the median expectation of the rupee is at 54 to the dollar by the end of December, which will further stabilise to 53 by this fiscal-end.