Moderate inflation, lower oil prices suggest room for rate cuts: Gokarn

Reserve Bank of India deputy governor Subir Gokarn on Monday said there could be room for a rate cut if inflation rate moderates and global oil prices get softer. Gokarn's statement comes ahead of the central bank's mid-quarter policy review on June 18.



Citing a recent drop in banks' daily borrowings from the RBI, he said that liquidity in the banking system is in "comfort zone" as of now.

After a gap of three years, Reserve Bank Governor D Subbarao in April had slashed short term-lending rate by 0.50 percentage points to 8 per cent.

In March, it slashed CRR - the portion of deposits banks are required to keep with the central bank - by 0.75 percentage points to 4.75 per cent, a step that infused Rs 48,000 crore into the economy.

With agency inputs