Rate cut, lower deficit likely

On 3rd May, there is a possibility that Reserve Bank of India (RBI) will cut repo rate in its monetary policy. Weak growth and declining WPI inflation is likely to prompt RBI to consider a rate cut in its annual monetary policy. The rupee extended its gains to 54.33, strongest since 2nd April. The recent fall in commodity prices is a boon for the economy and would help in keeping the inflation in check and will help moderate oil and gold imports in the coming months. India is expected to reduce the fiscal deficit to 3% by 2016-17.

I said in the year 2012-13 I will bring fiscal deficit down to below 5.3%, and going forward, I will reduce the fiscal deficit every year by 0.6% until we have achieved the target of 3% in 2016-17. I said these are red lines. I will not breach these red lines, said the Finance Minister, P Chidambaram.  

In the domestic futures market, at 2.05 pm IST, the May 2013 series were trading in negative at `.158.40 a kg, June at `.157, July at `.156.99 and August at `.156.79 a kg on the National Multi Commodity Exchange. The price of Malaysian SMR 20 closed at `.129.05 a kg. The contract for delivery in September closed at ¥257.3 a kg on the Tokyo Commodity Exchange.

Read lot more in Rubber4U – 1st May 2013 issue