OUTLOOK

The Finance Minister got into action again and announced he would nearly halve the deficit in just over four years. Expectations are that such an announcement could increase the chances a rate cut today.The rupee weakened past the 54-level against the dollar ahead of RBI meet. The RBI has indicated that it’s ready to support growth and ease interest rates if “macro-risks from inflation and twin deficits recede further”. In its ‘Macroeconomic and Monetary Developments Second Quarter Review 2012-13,’ the RBI said, “Growth-inflation balance warrants careful policy calibration as growth slows but inflation risks persist." A CRR cut is widely expected. Will the RBI oblige on a rate cut, we will know in a few hours.