RBI Under Pressure to Cut Rates

India’s economic growth probably slowed to around 5 percent in the three months to September, slipping from 5.7 percent in the previous quarter, two senior finance ministry sources said, putting pressure on the central bank to cut interest rates.

The sources said Finance Minister Arun Jaitley would press Reserve Bank of India (RBI) Governor Raghuram Rajan to lower borrowing costs when the two meet ahead of a decision on interest rates next Tuesday.

Six months after Prime Minister Narendra Modi swept to power with a promise that “better days are coming”, growth of 5 percent would mark a serious setback from the previous quarter and fall far short of the 8 percent that Asia’s third-largest economy needs to create enough jobs for its growing workforce.

Reuters

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