The RBI is likely to go in for another policy rate cut before the end of the year, which will lead to recovery in credit demand
Mumbai: The RBI is likely to go in for another policy rate cut before the end of the year, which, along with fiscal consolidation and domestic regulatory easing, would lead to a gradual recovery in credit demand, according to a Goldman Sachs report.
“We expect an additional policy rate cut before year-end, and the recent GST simplification signals that peak fiscal consolidation is behind us. We expect this, along with domestic regulatory easing, to foster a gradual recovery in credit demand,” the report said.
The report observes that the recent measures announced by the RBI should ease supply-side credit conditions; however, the extent of incremental lending will depend on the demand situation in the broader economy.
